In its final scheduled meeting of the year, Philadelphia City Council on Dec. 11 unanimously approved a bill that closes a loophole used by scammers to steal properties from unsuspecting owners.

The legislation, which goes into effect immediately, prevents people who have committed deed fraud from potentially receiving refunds of the taxes paid to transfer the property to themselves unlawfully.

Cases of house theft and deed fraud have increased in recent years. Between 2013 and 2017, Philadelphia averaged 72 reported cases of deed fraud a year. In 2024, there were 111 reported cases, according to the city.

“This legislation is a lifeline,” said Majority Leader Katherine Gilmore Richardson, who introduced the bill. “It ensures that victims of deed fraud – who have already faced unimaginable emotional and financial hardship – can access meaningful relief as they work to rebuild and plan for the future.”

Deed fraud is when someone unlawfully transfers ownership of a property to themselves without the true owner’s knowledge. To record a title with the city, property owners, including perpetrators of deed fraud, must pay a transfer tax. Once a deed fraud case is successfully completed in court and the rightful owner once again has title to their home, however, it is as if the transfer never happened and scammers can request a refund of the tax paid. This bill changes the realty transfer tax section of the code to make it so victims can request a refund of any transfer taxes paid by the fraudulent party.

“In most deed fraud cases, the bad actors do not show up in court, so monetary judgments against them mean very little,” said Kate Dugan, the divisional supervising attorney at Community Legal Services. “It’s rare for a deed fraud victim to collect any meaningful money damages or restitution. Today’s legislation provides a measure of financial relief to Philadelphia families who must bear the expense of litigating a court case to reclaim their properties.”

“This legislation corrects a fundamental inequity,” said James P. Leonard, the city’s Commissioner of Records. “When fraudsters steal property, they sometimes pay realty transfer tax to make the theft look legitimate. Victims then spend thousands of dollars in legal costs to reclaim their homes. This bill allows victims who prove fraud in court to recover that tax, providing real financial relief. Philadelphia stands with victims, not fraudsters.”

Victims will need to provide a court order to apply for the refund with the City.