Appealing 97% Increase in Assessed Property Value

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fitzroymac
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Appealing 97% Increase in Assessed Property Value

Post by fitzroymac »

My mother, a homeowner in Pennsylvania, recently received the results of the county's reassessment of the fair market value of her single-family home. Long story short, the assessed land value increased by 299% (!) while the improvement value decreased by four percent. In total, the new assessed value is 97% greater than the former assessed value, which had been pretty stable for years. Obviously, this means that her total property taxes will nearly double.

I searched this website for past threads on this topic, but many of them deal with contesting an existing assessment due to declining prices in your neighborhood. This case is a bit different. Does anyone have any experience appealing a drastically higher reassessed value, as in my mother's case, particularly in Pennsylvania? She's lived in her current residence for over 25 years.

Also, apparently there's an attorney in town who offers to appeal one's reassessed value in exchange for one-third of the tax savings resulting from his efforts in the first tax year and a subsequent one-third of the tax savings in the second tax year after the reduction. Is this a standard fee? Is it worth it?

Otherwise, what information does one have to marshal to appeal the reassessment and succeed? It seems that the county is doing this to many other homeowners in the area. Records of recent sales in the neighborhood are few and far between based on my preliminary research on Zillow.com.

Any advice would be greatly appreciated. Thanks in advance!
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Boglenaut
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Re: Appealing 97% Increase in Assessed Property Value

Post by Boglenaut »

Are they fracking in her backyard? That is bizarre. I'd collect as much info from zillow and other sources and appeal.

I appealed 5 years ago, and they lowered it more than I requested. Having a zillow print-out helped.
sscritic
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Re: Appealing 97% Increase in Assessed Property Value

Post by sscritic »

When was the value of the land last adjusted? Has it never been raised in the last 25 years? Perhaps she has been getting a bargain for 20 years.
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N1CKV
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Re: Appealing 97% Increase in Assessed Property Value

Post by N1CKV »

I'm just taking a stab in the dark here because I have no experience it doing this, but logically thinking I would proceed as follows.
Locally we have an elected Assessor who determines property values and proper taxes applicable and they are collected by the Sheriff (I assume this is the same in other jurisdictions):

1. Contact your Assessor's Office and inquire about how they came to that figure - be nice! They won't want to help you if you are not polite to them.
2. What is your mom's age? In some states (Such as Louisiana, where I am) a homeowner can put a freeze on increases in assessed values if they meet certain criteria such as disabled veterans and senior citizens (this is to prevent them from losing their home from market changes).
3. Perhaps inquire about getting your own appraisal done on the property. If you present the Assessor with a certified appraisal they may have a procedure to investigate the difference, whether it is taking that appraisal or moving to arbitration type proceedings.
JDCPAEsq
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Re: Appealing 97% Increase in Assessed Property Value

Post by JDCPAEsq »

A doubling of the assessed value doesn't necessarily mean the taxes will double. Possibly everyone else's assessment is also doubling, and if the total taxes for the area remain the same her taxes may remain the same as well.
John
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HueyLD
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Re: Appealing 97% Increase in Assessed Property Value

Post by HueyLD »

fitzroymac wrote:..the former assessed value, which had been pretty stable for years. Obviously, this means that her total property taxes will nearly double.
Where I used to live, property tax was based on the value of the last transaction date. As a result, one who bought a house many years ago paid next to nothing while those with much shorter ownship history paid disproportionally high taxes. The local government finally decided to adopt a new system whereby every property's value was adjusted annually based on three commonly used appraisal methods: cost, sales comps and income approaches. In order to minimize the property tax increase on low income elderly, there was a special provision to provide for homestead exemption (i.e. lower taxes) for those elderly.

Of course, lots of people complained and lined up to appeal their property taxes, but the county government was well prepared and the reassessment issue went away in due time.

So, the OP's mother may have options. She (or the OP) needs to contact the local taxing entities for the options.
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NateH
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Re: Appealing 97% Increase in Assessed Property Value

Post by NateH »

many counties have websites that can give the property values (building + land) for her immediate neighborhood. Of course if all of the properties are being adjusted, these data will be out of date. At least you can look at comparative values and see if there might be an error somewhere. A missed keystroke might have caused the whole thing.

Also, +1 to what John (JDCPAEsq) said.
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edge
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Re: Appealing 97% Increase in Assessed Property Value

Post by edge »

PA is infamous for totally bizzare assessments. Next door neighbors in similar homes have been known to have differences ranging from 8k -> 17k in annual property taxes. You will have to go through a court process to appeal and from what I can tell it is 50/50. And BTW, if she ever wants to sell that home she had better keep trying to get it lowered. Houses with exessively high property taxes relative to neighbors sit on the market forever in PA.

Media/Swathmore and some homes on the mainline in the Philly area are subject to this.
dickenjb
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Re: Appealing 97% Increase in Assessed Property Value

Post by dickenjb »

JDCPAEsq wrote:A doubling of the assessed value doesn't necessarily mean the taxes will double. Possibly everyone else's assessment is also doubling, and if the total taxes for the area remain the same her taxes may remain the same as well.
John
+1

I live in PA and a county wide reassessment brings values up to true values. If the tax base doubles the millage rate will be cut roughly in half. Take a deep breath and do some research before you panic.
bungalow10
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Re: Appealing 97% Increase in Assessed Property Value

Post by bungalow10 »

JDCPAEsq wrote:A doubling of the assessed value doesn't necessarily mean the taxes will double. Possibly everyone else's assessment is also doubling, and if the total taxes for the area remain the same her taxes may remain the same as well.
John
This exactly. The mil rate may go down by half and her total tax may remain stable.
An elephant for a dime is only a good deal if you need an elephant and have a dime.
Topic Author
fitzroymac
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Re: Appealing 97% Increase in Assessed Property Value

Post by fitzroymac »

Thanks for your replies! Apparently this assessment is for 2013. I did my calculations based on 2012 mil rates, so hopefully you're right that they'll go down for 2013. My mom tells me that the property was last assessed a few years ago, so it's not like it's ancient. Also, no fracking going on on the property--it's a small plot in a nice residential community. It's in Allegheny County if anyone's familiar.

Any thoughts about the attorney? For those who have appealed assessments yourselves, was it pretty straightforward? Any information to have on hand other than Zillow? I've looked on the county website for comparable properties, but the assessed values are all for 2012, so in the same ballpark as my mother's old assessed value.
sscritic
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Re: Appealing 97% Increase in Assessed Property Value

Post by sscritic »

Under Pennsylvania state law the last county-wide reassessment is the base year. In October 2005, County Executive Dan Onorato and County Council passed legislation implementing a base year system. Allegheny County’s last county-wide reassessment was 2002. All values represent the estimated base year market value of the property as of January 1, 2002, unless otherwise updated due to permits, appeals, corrections, flood loss or catastrophic loss. Base year methodology allows similar homes to have similar assessments until the next county-wide reassessment.
Are they updating the base year to 2012? Is there a county-wide reassessment? The Assessor's page doesn't say so.
sscritic
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Re: Appealing 97% Increase in Assessed Property Value

Post by sscritic »

Search, search, then search some more.
1. Why is Allegheny County conducting a countywide reassessment of your property?
The Allegheny County Tax Assessment Office is under a court order by the Allegheny County Court of Common Pleas Judge Stanton Wettick to reassess all properties in the County and those values will be effective for 2013 for all municipalities and school districts.
You don't have to live in Allegheny County to know what is happening in Allegheny County. Of course, if you had given us the Allegheny County fact in your first post, this all would have been revealed long ago.

P.S. forget the appeal.
sscritic
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Re: Appealing 97% Increase in Assessed Property Value

Post by sscritic »

More facts: her township's total tax can't go up. It is illegal (for the first year). That doesn't mean that her share can't go up.
By state statute [16 P.S. 4980.2 (a)], the Township must reduce its tax rate so that the taxes collected in 2013 will be equal to the total amount of property tax revenue received in 2012.
New P.S. She could appeal that her share went up relative to her neighbors, but then she would need to know her neighbors' new values.
Next, as a taxpayer you have a right to an informal hearing on the information presently being used to assess your property for 2013. Once all the hearings have been held, Allegheny County will finalize the assessment values and the Township will receive a notification of the 2013 total assessed taxable value for the Township.
JDCPAEsq
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Re: Appealing 97% Increase in Assessed Property Value

Post by JDCPAEsq »

sscritic wrote:Search, search, then search some more.
1. Why is Allegheny County conducting a countywide reassessment of your property?
The Allegheny County Tax Assessment Office is under a court order by the Allegheny County Court of Common Pleas Judge Stanton Wettick to reassess all properties in the County and those values will be effective for 2013 for all municipalities and school districts.
You don't have to live in Allegheny County to know what is happening in Allegheny County. Of course, if you had given us the Allegheny County fact in your first post, this all would have been revealed long ago.

P.S. forget the appeal.
Great detective job, sscritic! Agree - forget the appeal.
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N1CKV
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Re: Appealing 97% Increase in Assessed Property Value

Post by N1CKV »

simple Google search turned up this article that may be of an interesting read to you:
http://www.post-gazette.com/stories/new ... ts-627264/
porcupine
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Re: Appealing 97% Increase in Assessed Property Value

Post by porcupine »

bungalow10 wrote:
JDCPAEsq wrote:A doubling of the assessed value doesn't necessarily mean the taxes will double. Possibly everyone else's assessment is also doubling, and if the total taxes for the area remain the same her taxes may remain the same as well.
John
This exactly. The mil rate may go down by half and her total tax may remain stable.
John/bungalow10:

Is that the norm? I am pretty sure (though my memory has been known to fail me once in a while) that the millage did not decrease during the '00s in FL (especially the central and west-central portion that I am familiar with).

- Porcupine
bungalow10
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Re: Appealing 97% Increase in Assessed Property Value

Post by bungalow10 »

porcupine wrote:
bungalow10 wrote:
JDCPAEsq wrote:A doubling of the assessed value doesn't necessarily mean the taxes will double. Possibly everyone else's assessment is also doubling, and if the total taxes for the area remain the same her taxes may remain the same as well.
John
This exactly. The mil rate may go down by half and her total tax may remain stable.
John/bungalow10:

Is that the norm? I am pretty sure (though my memory has been known to fail me once in a while) that the millage did not decrease during the '00s in FL (especially the central and west-central portion that I am familiar with).

- Porcupine
It's the norm here. We get reassessed every five years. The mil rate generally goes down enough that the increase is in the 2-5% range.
An elephant for a dime is only a good deal if you need an elephant and have a dime.
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Steelersfan
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Re: Appealing 97% Increase in Assessed Property Value

Post by Steelersfan »

fitzroymac wrote: My mom tells me that the property was last assessed a few years ago, so it's not like it's ancient.
The last assessment was in 2005.

You can find her property here.

http://www2.alleghenycounty.us/reval/Search.aspx


Check the property details (occasionally they're wrong) and the comparable properties as determined by the company that did the assessments.
Topic Author
fitzroymac
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Re: Appealing 97% Increase in Assessed Property Value

Post by fitzroymac »

Thanks, particularly to sscritic for your thoughts and research on this. I'm not currently in the country so wasn't up-to-date on the goings on in Allegheny County, but I'm now researching the website about this court-ordered assessment and comparing my mom's property to others in the county, municipality, and school district.

It appears that the average county reassessment was +35%, the average municipality +48%, and average school district +45%. My mother's property was +97%. So more than double the average. If she plans to sell in 2-3 years, does it make sense to appeal and try to have the reassessment in the average range of increase for the area (i.e. +48%)? Or does it make more sense to keep the higher assessed value for selling purposes? (I've heard that if you argue for a lower reassessment, potential buyers can use that against you later.)
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Steelersfan
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Re: Appealing 97% Increase in Assessed Property Value

Post by Steelersfan »

If the data supports an appeal, then do it. Maybe she was under assessed previously. Maybe they made a mistake.

A higher assessment will only discourage buyers since that means their taxes will be higher than comparable properties if her's is out of line.
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White Coat Investor
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Re: Appealing 97% Increase in Assessed Property Value

Post by White Coat Investor »

I'd probably hire the attorney. Seems a fair price.

It's a lot like contesting a traffic ticket I bet. I went to traffic court and those with an attorney went first and always got out of the ticket. So in essence, they paid the attorney instead of the court. It is to those attorney's benefit to get in good with those who do the assessments, and I bet he/she has. Take advantage of it. I bet he more than makes up for his fees.

But keep in mind you have little to lose. If you don't get it lower, you lose nothing, since he's working on contingency fees. If you could get it lower doing it yourself, you would at most lose only 1/3 of the amount it was lowered, and only for 2 years. Chances are you're not as good at this as him, so you probably can't get it as low as he could. You will likely end up paying very little for his expertise.
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serbeer
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Re: Appealing 97% Increase in Assessed Property Value

Post by serbeer »

Here in the suburb of Chicago attorneys usually charge half of the saved amount in the first year only
rogermexico
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Re: Appealing 97% Increase in Assessed Property Value

Post by rogermexico »

I had a similar situation (about 400% increase) but the prior assessment was way low. I did contest and won a relatively small reduction but still faced a much higher tax bill. Generally on appeal the board does not care about equity (e.g. you are assessed near market but neighbors are underassessed). Rather they will look only at your assessment and how it compares with market value. An independent appraisal carries strong weight as evidence, as I learned on an appeal in later years when I had an appraisal from a refinance.
You will likely be given the opportunity to have the assessor do a full appraisal based on a walk through, but you should think carefully about this as the valuation could go even higher than the drive-by one if the house is nicer than average or has finished square footage that is not on your property card. Maybe get a realtors opinion on valuation first.
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Re: Appealing 97% Increase in Assessed Property Value

Post by investor »

Three cheers for California prop 13

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