ALLEGHENY COUNTY ASSESSMENTS
Allegheny County Property Tax Appeals:
- Residential property tax appeals
- Commercial property tax appeals
- Industrial property tax appeals
- Strip Malls / business owner occupied
- Restaurants / apartment complexes / hotels / shopping malls
- Vacant land
- Defense of school district property tax appeals
- Nunc pro tunc (late filing) appeals
Is the School trying to raise your taxes?
Even though Allegheny County is still using the 2002 base year system, school districts across Allegheny County are filing 2010 appeals against recent home buyers. You need to defend these appeals or they will raise your property taxes. What your home or commercial property sold for recently should have very little relevance as to what the property was worth is 2002.
We Help Answer Your Property Tax Questions:
What's the status and future for Allegheny County property taxes?
Just when property owners in Allegheny County thought that they understood the local system for assessing properties (the so-called 'base year') the PA Supreme Court has ruled that the 02 Base year is unconstitutional. Most residents already knew that.
While maintaining the 2002 base year was a smart move politically for the County Executive, Dan Onorato, (now running for Governor of Pennsylvania), it has having severe implications for new and recent home buyers in Allegheny County who are paying higher property taxes than neighbors in identical houses. What's worse, is that many residents will see 30% to 40% increases or more in their assessments with the new reassessment scheduled for 2012.
In 2009, the Supreme Court agreed with the Honorable R. Stanton Wettick, but they arrived at their conclusion in a different manner. Regardless, it appears that a reassessment is ordered by the high court and will now occur in 2012. (Read Judge Wettick's Legal Opinion Dated 11/10/09).
On February 2, 2010, the county has started to send certain property owners questions about their property. The county then intends to have an assessor visit some properties to verify county data. You are under no legal obligation to answer any questions or allow anyone on your property. These assessors are not your friends. To the contrary, they are gathering data that most often raises your property taxes. If someone is trespassing on your property without your permission, you have every legal right to call the police or call 911.
The fact is the Allegheny County property tax system is a wreck. Not only are our millage rates too high, but the assessments are all across the board for properties in the same neighborhood. If you bought your house recently, odds are you are paying higher property taxes than your neighbors who have lived there for many years.
The school districts continue to appeal almost all recent property sales and reap the benefits while increasing their own millage rates.
For now, the immediate question focuses on the current properties under appeal. They are still using the base year system at the hearings even though the highest court in Pennsylvania has declared it unconstitutional.
Our tax appeal lawyers will do our best to keep our clients updated of the ever-changing laws and rules of the game, and will continue to fight for reduced assessments in Allegheny County. We have had tremendous success in defending tax appeals filed by the school districts.
Allegheny County 2012 Reassessment
As of January 2010, Allegheny County is intending on reassessing approximately the 580,000 properties in Allegheny County, Pennsylvania. This includes all commercial properties, hotels, strip malls, restaurants, apartment complexes, residential properties, and vacant lands within the county.
It is believed that the County will use a base year of 2011 or 2012. This means that a property will be assessed at what the Allegheny County assessors believe the property is worth as of January 1, 2011 or 2012 respectively. What it really means is that there are going to be enormous increases in assessments throughout Allegheny County.
When a proposed assessment was proposed in 2006, property assessments were expected to increase as much as 40% in areas such as Sewickley, Sewickley Heights, Edgeworth, Sewickley Hills, Bell Acres, Fox Chapel, O'Hara, Upper St. Clair and Mt. Lebanon. Certain residents will see their actual tax bills double or worse.
Technically, the school districts are supposed to adjust their millage rates to prevent financial windfalls. The reality is that the school districts spend whatever money they bring in and it is very rare for school districts to ever lower their millage rates.
In 2002, the last reassessment, there were over 100,000 property tax appeals filed in Allegheny County. If the 2012 reassessment continues as planned, the number of appeals could easily exceed the amount of property tax appeals filed in 2002.
We will continue to fight for the thousands of clients we have already helped.
Can I still appeal in 2010?
For now, the immediate question focuses on the current properties under appeal. They are still using the base year system at the hearings even though the highest court in Pennsylvania has declared it unconstitutional.
Q: How do I Defend a School District Appeal?
A: By being more prepared and understanding the rules of evidence and law.
The school districts of Allegheny County are now filing 2010 assessment appeals against property owners who recently purchased their properties. The logic is that if the purchase price is higher than the current assessment, that the assessment should be raised. However, under the 'base year' system, that argument should fail. The test is still what the property was worth on January 1, 2002? What the property sold for in 2008 or 2009, should matter as much as what the property sold for in 1995 or 1996, (both are 6 and 7 years removed from the base year). Does that mean we are analyzing 12 -14 years of sales (1995-2009) for Allegheny County assessment appeals? Of course not.
The reality is that the school districts hope that the property owners do not appear or appear by themselves. Property owners are at a severe disadvantage when they try to represent themselves. First, they do not the system, the rules of law, or the forum involved. Second they do not have the advantage of negotiating and litigating cases against the taxing entities previously. Third and most importantly, the lawyer for the school can cross-examine the property owner to actually make their case against the property owner.
Often, at the hearing, the school district is only prepared with a copy of the Deed showing the new price. Some school districts are obviously more prepared than others and will bring comparable sales. But a copy of the Deed SHOULD NOT meet the school's burden of proof. If the homeowner appears, the school may cross-examine the homeowner, and use their testimony as evidence to increase the owner's assessment. For Example:
Cross examination:
School District Lawyer:
Q: Do you have a mortgage on your property? (How much?)
Q: Was there an appraisal performed?
Q: Have there been improvements to the property?
Q: New Kitchen? New appliances?
Depending on the property's owners responses, the school district or taxing entity may actually have a better case with the property owner present than if the property owner would have simply stayed at home. We are NOT advising anyone to stay at home or miss their hearing. However, understanding 'burden of proof' and understanding what the best evidence to submit is, does make a difference. Very rarely will I advise a property owner to attend the hearing, unless I believe it is necessary. There are trial strategies to tax appeals.
The 'base year' means that all properties should be assessed at what they were valued as of January 1, 2002.
This could change if there has been permits, appeals, corrections, or catastrophic loss. In short, similar homes should be assessed the same. However, everyone knows the assessment system is not perfect. Often, a recent home buyer is punished over those property owners who have not changed ownership for many years.
Even more complex, is what if the property is or has depreciated in value? If you bought your home in 2002, can you argue that the value has gone down? That's exactly what the school districts do when somebody pays more than the assessment. The assessment system in Allegheny County is far from perfect, and in fact, it's often grossly unfair. The answer is to abolish or significantly reduce overall property taxes; until then allow us to fight your appeals for you.
What is the process for Allegheny County Property tax appeals?
All new Allegheny tax appeals first are heard at BPAR (Board of Property Assessment and Review). The first hearing in the process is an administrative hearing, before a County Hearing Officer.
This takes place on the 3rd floor of the Allegheny County Office Building, and are usually in small rooms, with a Hearing Officer, and potentially lawyers from the school, county and/or municipality.
Sometimes an assessor from Allegheny County will also be present. The hearings are recorded by audiotape and the hearing officers are usually individuals with real estate experience (Appraisers/Real Estate Agents etc.)
Whoever filed the appeal has the burden of proving that the current assessment is incorrect. The Hearing Officer listens, allows the parties to cross-examine each other, and may ask questions on their own. At the end of the hearing, no decision is rendered and the Hearing Officer makes a written recommendation to the actual Allegheny County Board of Property Assessment. The Board of property assessment can then agree or disagree with the decision before mailing the Notice of Decision to the property owner. We have seen cases where the Hearing Officer makes a recommendation for either a decrease or increase, and the Board will overturn the decision, even though they weren't present at the hearing and no new evidence was submitted. In fact, I have seen it go both ways in favor of the schools and in favor of the property owners.
The decision is then mailed to all interested parties, normally about 6-10 weeks after the hearing (sometimes longer). At that point, all interested parties (the property owner and the taxing entities) have 30 days to appeal to the BOV (BOARD OF VIEWERS) which is actually the County level and is located on the 8th floor of the City County Building. At this stage the litigation is given a BV case number and becomes public record with the docket available on-line. Often once an appeal is filed to the County level (BOV) - it may take anywhere between 10 months and 24 months (sometimes longer) to get called for a second hearing.
ALMOST ALL OF THE RECENT SCHOOL APPEALS are being appealed to the BOV. The reason being if the taxes are raised, the property owner appeals, and if the school loses, the school appeals. At this second stage of litigation, it is called a 'De Novo' appeal (meaning fresh or new) and whatever happened at the first level (BPAR) is no longer relevant. It is once again crucial that the property owner understands how the process works on appeal.
We fully expect every single case to be appealed to the BOV. Often there will be multiple years at issue and the savings to our clients can be substantial. Also, the hearing at the BOV is a real court hearing, whereby it is essential to have proper representation. The rules of evidence and objections apply and a property owner is at a severe disadvantage if they attempt attending without representation.
This is simply a sketch of the process and by no means an exhaustive explanation.
How is Property Valued in Allegheny County?
Pennsylvania assessment laws require that real estate be valued according to its “actual value” and at a bona fide rate and price for which the property would separately sell.
The courts have interpreted actual value to mean market value. Market value has been defined by the Pennsylvania State 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.”
To establish the “actual” value of property, the county may use current year market values or it may adopt a base year for market values. For the most part, properties are assessed at a set percentage of base year values. Property is only assessed at current market value when a county wide reassessment has been conducted and implemented. Unless a county reassesses all properties every year, the property assessments will be predicated upon base year values (the last year in which the county reassessed). The same methodology must be used to value property throughout the county; that is, when a county adopts a base year for market value, then all property in the county must be valued as of the same base year.
The assessment laws state that “the price at which any property may actually have been sold in the base year or the current tax year is to be considered but is not controlling. Such selling prices can be increased or decreased as part of the valuation process to accomplish equalization with other similar property within the taxing district.” Recent sales of comparable properties, that is, properties of a similar nature, are persuasive but not conclusive in helping to establish the market value. The properties selected need not be identical. The sales prices, however, are useful in showing relative values by bringing out characteristic qualities, whether similar or divergent. Comparison based on sales may be made according to location, age, income, expense, use, size, type of construction and in numerous other ways.
When valuing property, three approaches must be considered in conjunction with one another; they are cost (reproduction or replacement, as applicable, less depreciation and all forms of obsolescence), comparable sales, and income approaches. Although all three approaches must be considered, they do not all have to be used in arriving at the final valuation of the property.
The approach used may differ depending upon the type of property involved (e.g., commercial, residential, income-producing). Many factors are considered in arriving at the fair market value of property. One very important consideration is the highest and best use of the property in question. It is not only the present use of a property that affects its value, but all of the uses including the highest and most profitable use to which Real Estate Assessment Process in Pennsylvania . . .
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An Overview the land is adaptable and available. The possible demand for such use affects the market value. Highest and best use, then, “is that use of a property that will generate the highest net return to the property over a reasonable period of time.” Highest and best use of property must be supported by the following criteria; the use must be: Legally permissible; Physically possible; Financially feasible; and Maximally productive.
The courts have recognized that “economic reality” factors also influence real property values. As mentioned previously, the valuation placed on a property should reflect what a willing buyer would pay in the open market for all the property rights that the present owner will transfer to him. A buyer would likely discount the price of a property due to “restrictions” or “regulatory requirements” or “encumbrances” that are tied to the property. For example, if income restrictions based on applicable federal regulations or income restrictions based upon bona fide contractual obligations are attached to a commercial property, the fair market value of the property would be “deflated” because a buyer cannot anticipate income at a current market value. Thus, the present market value should logically reflect the economic dynamics impacting the property as it presently exists. (Source: PA Legislator's Municipal Desk book)
Past Assessment Headlines: (Source Post Gazette)
37 year History of Allegheny County Property Assessments
1970 -- Green Tree Borough filed suit challenging the county's system of assessing one-third of the county every year, claiming that was unfair to all three areas
1977 -- Wilkinsburg filed a similar suit.
1979 -- Common Pleas Judge Nicholas P. Papadakos took control of the cases.
Oct. 1, 1979 -- Judge Papadakos brokered a consent decree that eliminated the annual regional assessments and required the county to assess every property on a regular basis.
Oct. 17, 1982 -- Judge Papadakos ends court oversight of the assessment system because the changes resulted in "fair, equitable and uniform assessments."
Feb. 13, 1992 -- A computer-aided study of 500,000 properties by the Pittsburgh Post-Gazette finds the values of many of them are substantially out of whack compared to their purchase price.
January 1994 -- An effort to address assessment problems results in substantial increases in property values -- some more than 40 percent -- leading to a taxpayer revolt.
Jan. 1, 1996 -- Fueled by the assessment controversy, Republicans Larry Dunn and Bob Cranmer give their party majority control of the county commissioners for the first time in six decades. Their first day in office they freeze assessments for five years so the county can fix the system.
May 13, 1996 -- Six homeowners file suit against the assessment freeze, claiming it unfairly freezes values at inaccurate levels.
April 15, 1997 --Judge R. Stanton Wettick Jr. declares the freeze illegal and orders the county to prepare a plan to begin developing a new assessment for implementation in 1998 for properties whose values are more than 20 percent above or below fair market value.
Jan. 9, 1998 -- In exchange for the county implementing a full reassessment by 2001 instead of 2002, Judge Wettick puts off changes for properties more than 20 percent off of fair market value but also orders across-the-board assessment increases of 2 percent for every property in the county for 1999 and 2000.
Feb. 10, 1998 -- County hires Sabre Systems and Service of Miamisburg, Ohio, to complete the county wide reassessment for $23.9 million.
Jan. 1, 2000 -- Republican Jim Roddey, elected as the first county chief executive, inherits the assessment mess.
Jan. 9, 2001 -- The county Property Assessment Oversight Board certifies new values for 552,000 properties at $57.1 billion across the county, up 48 percent from 2000. This leads to more than 90,000 appeals.
Jan. 2, 2002 -- The new county assessment figures show an overall increase of 11 percent, again leading to more than 90,000 appeals.
Jan 24, 2002 -- Mr. Roddey and County Council say they will institute a three-year waiting period before the next county assessment.
Nov. 4, 2003 -- Campaigning largely on problems generated by new assessments, Democratic county Controller Dan Onorato defeats Mr. Roddey.
Feb. 15, 2005 -- Responding to proposed new assessment figures for 2006 that would have nearly 80 percent of homeowners facing an assessment increase -- 17,000 of them 100 percent or more -- Mr. Onorato proposes to cap increases at a maximum of 4 percent.
May 12, 2005 -- Judge Wettick rules the 4 percent cap is illegal, claiming it would only "exacerbate" disparities in the 2003 assessment.
Sept. 20, 2005 -- Mr. Onorato announces revised assessment figures for 2006 that call for average residential increases of 5.8 percent.
Oct. 4, 2005 -- In a surprise move, Mr. Onorato decides not to use the revised figures for 2006 and instead called on County Council to establish 2002 as a base year for assessments, putting the county in line with most other counties that use a base year and adjust assessments to meet values in the base year.
Oct. 27, 2005 -- Kenneth Pierce of Braddock and Stephanie Beechaum of the Hill District file suit against the base-year system, saying their properties have decreased in value since 2002.
Oct. 31, 2005 -- A second group of homeowners file suit to challenge the base-year system.
March 16, 2006 -- Judge Wettick rules that state law allows the county to use a base-year system for property assessment, but he allows attorney to challenge the constitutionality of the state law.
June 6, 2007 -- In a landmark decision, Judge Wettick rules the state law allowing counties to use a base year for property assessments is unconstitutional because it doesn't treat all taxpayers uniformly, which is a primary requirement
2009 - Supreme Court rules Base Year unconstitutional
2009 - Wettick Orders 2012 Reassessment