FAQs – PA
Q: What is a property assessment?
A: An assessment is a percentage of the market value of your property. The assessment is the foundation which the taxing authorities use to determine the amount of real estate taxes based on their tax rates.
Q: What is the filing deadline for a tax assessment appeal?
A: See table below:
|Berks||August 15, 2013|
|Bucks||August 1, 2013|
|Chester||August 1, 2013|
|Dauphin||August 1, 2013|
|Delaware||August 1, 2013|
|Lancaster||August 1, 2013|
|Lehigh||August 1, 2013|
|Montgomery||August 1, 2013|
|Philadelphia||October 6, 2013|
Q: Who actually sets my assessment?
A: The assessment is set by State licensed assessors employed by the County that hold the designation of Certified Pennsylvania Evaluator (CPE). The assessor does not set the tax rates. The assessor only sets the assessment based on a determination of the market value of your property and application of the applicable ratio. The individual taxing authorities set the tax rates for their respective municipality and school districts which are then applied to the assessment to determine the taxes due.
Q: What is the difference between an assessment and taxes?
A: The assessment is the basis used by the County, boroughs, townships and school districts to levy taxes by multiplying the millage rate of the taxing authority times the assessment. The taxes are the actual dollar amount paid by an individual.
Q: What is a Board of Assessment?
A: Counties within the Commonwealth of Pennsylvania have a Board of Assessment Appeals which has the responsibility to administer assessments. The Board is an independent agency appointed by the County Commissioners. The Board was specially created by the Pennsylvania Legislature to assess all real estate in the County for the taxing districts (County, Municipality, and School District). The Department has the authority to make all assessments of real property for taxation purposes. One of the Board’s duties is hearing assessment appeals.
Q: What is a Common Level Ratio?
A: Sometimes called the “STEB ratio” or the “equalization ratio,” this ratio becomes relevant in an assessment appeal. It is an empirical ratio which measures how a county’s assessments compare with current real estate market valuations. Each year the Pennsylvania State Tax Equalization Board (STEB) certifies each county’s common level ratio. It is developed by comparing the recent actual arm’s length selling prices of real property in the county with the assessments of each sold property. For instance, if a property with an assessment of $40,000 sells at arm’s length for $200,000, its individual empirical assessment ratio is 20%. The average of all such assessment ratios of county properties which sold at arm’s length over the past year is certified as the common level ratio or STEB ratio.
Q: What is the Common Level Ratio (CLR) for my county? The CLRs listed below are effective as of July 20, 2011.
A: See table below:
Q: How does the CLR affect my individual property taxes?
A: The CLR works in conjunction with your total taxable assessment. On your tax card, there will be listed a total taxable assessment which represents the total fair market value of your property determined by the assessor, as of the last assessment. Since the last assessment of your property may have occurred several years ago, a ratio is used in an effort to take into account appreciation and inflation, and to make sure that you are taxed at the “appropriate” level.
For example, consider a property in Montgomery County with a CLR of 56.1. The last county-wide reassessment of Montgomery County took place in 1998. The CLR of 56.1 represents a taxable assessment of 56.1% of today’s current fair market value of the property.
Equation: Assessment / CLR = Assessed Market Value (AMV)
Example: $350,000 / .561 = $623,886(AMV)
Q: What is Assessed Market Value (AMV)?
A: The Assessed Market Value (AMV) represents the amount the County determined to be the current Fair Market Value for the property. The AMV does not take into account factors that may affect the value of a property such as location, school district, condition, curb appeal, etc. In the example above, this Montgomery County property owner is being taxed as if their property is currently worth $623,886.00.
Q: What is Fair Market Value (FMV)?
A: The Fair Market Value (FMV) is the price at which a willing buyer will purchase from a willing seller in an arms-length transaction. Market Value has been defined by the Pennsylvania Supreme Court as “the price in a competitive market a purchaser, willing but not obligated to buy, would pay an owner, willing but not obligated to sell, taking into consideration all the legal uses to which the property can be adapted and might reasonably be applied.”
Q: What is an Arms-Length-Transaction?
A: An arms-length-transaction is when: (1) the buyer and the seller are unrelated; (2) the buyer is aware of the relevant facts about the property; (3) neither party is forced to buy or sell; and, (4) all rights and benefit inherent in (or attributable to) the property are included in the transfer.
Q: What if the Fair Market Value (FMV) is less than the Assessed Market Value (AMV)?
A: If the FMV is less that the AMV than the assessment may be ripe for an appeal. For the appeal to be successful, the property owner must prove to the Board of Assessment that the current FMV of the property is less than the current AMV. Typically, this can be done by producing a current appraisal of the property or a recent settlement statement.
Q: If I appealed my tax assessment within the past few years, can I appeal them again?
A: Yes. It is the right of every property owner to appeal their tax assessment every year. However, the property owner bears the burden of proof to demonstrate to the Board of Assessment that their taxes are over assessed.
Q: Will my mortgage company receive a copy of the appraisal and will it affect my mortgage?
A: No. Your mortgage company will not receive a copy of the appraisal and the appraisal will not affect your mortgage.
Q: Is there a chance that my assessment will increase?
A: Yes. There is the chance that your assessment may be increased. Increase in tax assessments are usually a result of improvements or upgrades to the property that were not reported to the tax assessor’s office. This may be a result of the contractor or homeowner’s failure to obtain a permit from the Township for the specific improvement or upgrade. For example, the tax assessor’s office may be unaware of an in-ground pool on the property. When the presence of the pool is indicated in the appraisal report at the hearing, it may give the assessor grounds to reassess the property.
Q: Can I obtain the information used by the assessor to assess my property?
A: Yes. Each tax assessor’s office retains a file on every property. In that file is usually an Assessor’s Worksheet which contains the inspection data, sales information and calculations used by the assessor in arriving at the assessment value for your property. This document is a matter of public record and you, as the property owner, have a right to request and review this information. Some offices do charge a small fee to cover the administrative costs of retrieval.
Q: If my house was recently appraised for a refinance, can I use that appraisal?
A: No. Each appraisal is prepared for a specific intended use and a specific intended user. In this case your recent appraisal was prepared for a lender to use in evaluating the strength of your property for finance purposes. In the case of a tax assessment appeal, an appraisal is prepared to be used by you (and the assessment office) for the purpose of appealing your tax assessment.