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Prepare for Tax Reassessment

Real estate tax assessments affect the cost of keeping a roof over your head. The assessed value of your home determines how much real estate tax you pay. And for many in Allegheny County, your tax bill may be going up.

County-wide tax reassessment is here, and it’s going to be challenging for many.

Real estate taxes are based on the value of the land and buildings you own, and assessment is the way that the value is determined. The county government sets the assessed value, one property at a time, as the basis for taxes. After reviewing data on file about each home (or commercial property), and viewing each property from the outside, a value is set.

But an assessment is only an opinion, and many homeowners disagree when their assessed value is too high. When you do, you have a chance to fight back.

Background

Pennsylvania law requires uniformity in taxes, so that every taxpayer is treated the same as other taxpayers in the same situation. Each county has its own system, which leads to big differences in results -- and those differences get exaggerated over time.

Until recently, in Allegheny County the “assessed value” was set equal to one quarter of the actual fair market value. Other Pennsylvania counties have assessment values (according to state research) in ratios ranging from 1.00 up to 8.85!

Then came the lawsuit(s). In 1996, a group of citizens sued, claiming that the system was unfair and illegal, since so many properties were assessed either too low or too high, and that many owners were therefore not paying their proper, uniform share.

The Reassessment

Through many twists and turns, the courts, including the PA Supreme Court, ultimately agreed, and ordered a county-wide reassessment. In response to court orders, the County adopted new assessment values or systems in 2001 and 2006 for all properties, and has been under orders since 2009 to perform a complete reassessment for the 2012 tax year.

To do so, county officials sent all owners questionnaires in the mail describing the existing detailed information about their homes – number of rooms, bedrooms and baths, heating and air conditioning, parking or garages, etc. – and provided an opportunity for homeowners to correct any mistakes. Then, county assessors viewed each address from the street. New assessments were to be based not only on each house’s specific facts, but also on location and neighborhood trends.

How Your Home is Valued

Home values are mostly based on sales of comparables, or nearby similar properties. “Fair market value” can be defined as the price that a knowledgeable, willing buyer would pay to a knowledgeable, willing seller.

The best evidence of real value for your home comes from comparisons to actual sales of comparable homes, where the value is established in the ongoing marketplace between all buyers and sellers, and not by comparing your assessed value to the assessed value of other nearby homes (it’s theoretically possible but very difficult in practice to win an assessment appeal based on lack of uniformity between your individual assessment and others’ assessed values). Values reflected in actual recent sales are key.

By comparing actual sale prices to assessed values, we learn that more modest homes are often assessed too high, and more expensive homes are often assessed too low. That means poorer folk generally pay more than they should, and richer folk generally pay less (that was the complaint in the original lawsuit).

Therefore, you can expect that if your home is larger, fancier and in a nice neighborhood, then your assessed value, and your tax bill, may go up.

Maybe I’m naive, but I think many people are willing to pay their fair share. However, they don’t want to be taxed unfairly as a result of wrong opinions about their homes.

What should you do?

First, make sure you are receiving your mail from the County about reassessments reliably, at the right address. Don’t miss the deadline to appeal if you need to. Many Pittsburghers stay put for a long time, but if you’ve moved or had trouble in the past getting your tax assessments or bills for any property, confirm your mailing address to be sure you don’t miss getting your new assessment notice. Call the County at 412-350-4134 or log on at www.alleghenycounty.us/re/addrchg.aspx. (To change your address for tax bill mailing, call separately to the County Treasurer’s office at 412-350-4100. If both addresses need to be changed, you must contact both offices.)

Second, review your property description by visiting the Allegheny County Department of Real Estate in the County Office Building in downtown Pittsburgh, logging online at www2.county.allegheny.pa.us/RealEstate/Default.aspx, or by calling the Department at 412-350-4226 for more help.


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