A short guide for Philadelphia rental-property owners during tax season.
Many Philadelphia landlords see a Department of Revenue hold and assume the City wants property taxes. In practice, the more common issue is simpler: the City believes required business-tax returns are missing. That matters because landlords need to stay current on City taxes, including BIRT, to keep licenses in good standing and obtain tax clearance (Landlord Gateway)
For the large majority of landlords with ordinary long-term rentals, the City filing checklist is short. It usually comes down to two returns: BIRT and NPT. Philadelphia says residential rental activity is subject to BIRT, and it says rental activity is, in most cases, considered a business for NPT purposes (BIRT page) (NPT page)
1. BIRT
BIRT is Philadelphia’s business tax. For landlords, think of it as the City’s tax on your rental business. It has two parts: one based on rent collected and one based on profit. For tax year 2025, filed in 2026, the rates are 1.410 mills on gross receipts and 5.71% on taxable net income (BIRT page)
The big recent change is that the old $100,000 BIRT exemption is gone. Tax year 2024 was the last year landlords could rely on that exemption. Starting with tax year 2025, even smaller landlords must file BIRT. The City has also said first-time 2025 BIRT filers affected by that change will not be required to make a first-year estimated payment with that first 2025 return (2025 tax-policy update) (transition clarification)
2. NPT
NPT is the City tax on net profit. For most non-corporate landlords, this is the second return that needs to be on file. For tax year 2025, filed in 2026, the rate is 3.74% for Philadelphia residents and 3.43% for non-residents. One important caveat: corporations are exempt from NPT, so this two-return framework is most accurate for landlords operating as individuals, partnerships, or LLCs (NPT page)
NPT is not redundant with BIRT. Philadelphia requires both returns, but it also allows many non-corporate taxpayers to claim a credit against NPT based on the BIRT paid on the net-income portion. The City’s 2025 NPT worksheet shows that the credit is 60% of the applicable BIRT amount, limited to the NPT otherwise due (2025 NPT form and worksheet)
What that looks like in practice
The examples below assume $2,000 per month in rent per unit, a 40% net profit margin, long-term rentals, and a non-corporate owner. The NPT numbers shown below already reflect the available BIRT credit.
| Units | Annual Rent | Net Profit at 40% | BIRT | NPT After BIRT Credit, Resident | NPT After BIRT Credit, Non-Resident | |
| 1 | $24,000 | $9,600 | $582.00 | $30.14 | $0.38 | |
| 3 | $72,000 | $28,800 | $1,746.00 | $90.43 | $1.15 | |
| 5 | $120,000 | $48,000 | $2,910.00 | $150.72 | $1.92 | |
| 10 | $240,000 | $96,000 | $5,820.00 | $301.44 | $3.84 | |
| Important note: The non-resident NPT can look surprisingly small because the chart already reflects the allowed credit for BIRT paid on the net-income portion. In other words, a non-resident landlord may still owe substantial BIRT, but only a very small additional NPT after the credit is applied. The NPT still has to be filed. (2025 NPT form and worksheet) | ||||||
Bottom line: for the large majority of Philadelphia landlords, the City is not looking for a long list of business-tax filings. It is usually looking for BIRT and NPT. And because the BIRT exemption ended after tax year 2024, even smaller landlords should now make sure that BIRT return is being filed every year. (2025 tax-policy update)
Linked sources used in this article: BIRT page; NPT page; Landlord Gateway; 2025 tax-policy update; 2025 NPT form and worksheet
Comments are closed