Secrets to Winning Your 2017 Property Tax Appeal
Hints & Tips For Property Owners
Once again approximately ten thousand property assessment tax appeals have been filed in Allegheny County, PA for 2017. Some of the appeals were filed by residential or commercial property owners, but most of these tax appeals have been filed by school districts or the municipality challenging the current assessments based on a recent sale price.
This page should help property owners who filed their own appeals increase their chances for a reduction, and also provide guidance for property owners who have had their property assessments appealed by the school districts or other taxing entity.
I. The Tax Appeal Process
Step 1 is always understanding the tax appeal process. To significantly increase chances in an Allegheny County assessment appeal, property owners must have some basic understanding of the two step tax appeal process.
- First, there is a BPAAR (Board of Property Assessments Appeals and Review) hearing administered by a hearing officer, who has professional real estate experience (i.e. appraisers, agents, etc.). The BPAAR hearing is typically held at the Allegheny County Office of Property Assessments, located on the 3rd Floor of the County Office Building. At the first level BPAAR hearing, evidence is offered by both sides, and the hearing officer then makes a written recommendation to the actual Board of Property Assessment. The Board of Property Assessment typically takes about 60-90 days to render a decision, called a “Notice of Disposition”. Once the decision, or “Notice of Disposition” is sent, all interested parties then have 30 additional days from the mailing date to appeal this BPAAR decision to a second level BOV (Board of Viewer) hearing. This is a ‘de novo’ appeal, meaning fresh or new.
- Second, there is the BOV (Board of Viewers) hearing. This is a more formal hearing in the Court of Common Pleas of Allegheny County. The BOV has a civil docket number and is held on the 8th floor of the City County Building in front of an assigned administrative judge. If the parties are unable to resolve the tax appeal, the matter is scheduled for an actual trial, where all applicable Allegheny County local rules of court apply. Once the BOV court renders a decision, all parties may appeal to the discretion of the Honorable R. Stanton Wettick, whose review is limited to the evidence from the BOV hearing, and legal briefs are submitted by the parties.
- Third, and finally, if the parties are still not satisfied, an appeal to the Commonwealth Court of Pennsylvania can be filed alleging that the lower court abused its discretion or made an error of law. Few cases are appealed this far. Theoretically, the case could also be appealed to the Pennsylvania Supreme Court.
II. The Evidence
- In order to change a property assessment in Allegheny County, the filing party has the burden of proof. Specifically, to prove market value of the subject property. This is most often accomplished through comparable sales, but other valuation methods may also be used (i.e. cost approach, income approach).
- Recent sale prices are persuasive, but NOT conclusive, meaning a sales price is NOT controlling in an assessment appeal, and the evidence must include comparable sales. If you have been appealed, and the school attorney only presents a deed or county web page, the school district should lose because they did not present comparable sales to support their appeal.
- The primary issue for 2017 current appeals (property owner or taxing entity) is the fair market value of the property, either in the current year (and then applying a ratio) or as of the base year January 1, 2012.
- The Appellant (appealing party) can use either a base year valuation method or a current fair market value method in their argument. The base year valuation method focuses on what the property was worth in 2012 by looking at sales information around that time. The current fair market value method focuses instead on more recent sales, and requires that this opinion be depreciated backwards to reflect a 2012 value.
- The best evidence is to provide proof of similar properties, similarly located, which have recently sold for less than your property is assessed.
- You should have a minimum of 3 comparable sales, but if you can find more it can be very persuasive to submit them, if they help.
- You should print out all of the county webpages for any comparable sales you intend to offer. (County comparables can be found on the Court-Ordered Allegheny Real Estate Website). Be certain to at least print the home page, building information page, and image for any comparable sales offered as evidence.
- You are required by local rules to have at least 3 copies of any evidence you intend to offer, or in theory the evidence can be denied.
- Appraisals can help, but are not always necessary, and in some cases are discouraged.
- Pennsylvania law requires that one of three recognized valuation methods be used in order to change a property assessment. They are a) the comparable sales approach; b) the income approach; and/or c) the cost approach.
- If you are defending a school district appeal, remember that a sales price alone can be persuasive evidence, but it does not meet the burden of proof without a valuation method being considered. Read more about defending school district appeals.
III. Hints, Tips & Secrets
- Any time a property tax appeal is filed, the assessment could be sustained, decreased or increased.
- Property owners may freely withdraw appeals filed at the BPAAR before a hearing (the first level hearings), but are NOT allowed to withdraw BOV appeals (second level appeals) without the taxing entities consent. This is an important consideration before deciding to appeal any first level decision.
- Research settlements of your neighbors cases before any settlement at your BOV case. Conduct a percentage analysis of both your neighbors settlements as well as your neighbors assessment compared to their purchase price. This information can be found on the Allegheny County civil docket access. School attorneys may become very defensive if you raise evidence as to how they settled other cases, but in our opinion, should be relevant. If two homes sold on the same street at the same time, they should settle for close to the same percentage. In addition, they should be assessed comparatively as well. The problem in Allegheny County is that there are still gross discrepancies between assessments and percentages new homeowners are taxed at. Knowing the assessments of those properties around the subject property can most certainly help in decreasing property assessments..
- Make sure you know the entire market of the property you are appealing better than the attorneys opposing you. This means knowing the evidence that both helps and hurts your case. As stated above, this means also having comparable sales both from 2012 and from the current base year. Distance and neighborhood code are typically the most important factor (of course not always), but the closer your comparable sales are, typically the better. We often recommend bringing a map as evidence and calculating the distance, especially at the Board of Viewers.
- Comparable sales can be found online at the Allegheny County website, zillow.com, or by contacting local real estate agents or appraisers and asking for a comparable sales analysis.
- Be nice. Seems obvious, but hearing officers are tired of frustrated property owners or perhaps expect many people to be angry. Typically, preparation and kindness will work better than anger towards the individuals involved. Likewise, there is no benefit of being hostile with the attorneys from the taxing entities as the case will most likely be appealed to the second level and these are the same attorneys you will probably be negotiating with in the future.
- If you hire legal representation, make sure the representative is a lawyer and that the legal fee covers the entire length of the representation, regardless of appeals to the BPAAR or BOV. These cases are more often than not appealed again to the second level BOV and we have received many calls from clients who were not told about the “double” appeal process.
- Most of these cases are appealed to the BOV. If you are paying an attorney on a contingency fee, make sure you understand if the fee includes future years. Our fee ONLY includes the years under appeal. If the appeal ends in year 1, our contingency is calculated off of the first year only. Likewise, if the appeal lasts two years (as many cases do) then our fee is for the first and second year only.
- Less can be more. Efficient, organized presentations are appreciated by the hearing officers and may tend to lead to better results. Be smart about proving market value both in 2012 and/or 2017.