What homeowners need to know about property reassessments

An expert says not everyone’s taxes will increase.

By MEGAN TROTTER
TribLive

For the first time in more than a decade, Allegheny County is preparing to reassess the value of every property in the county — a process that could change how much many homeowners pay in property taxes.

A judge has ordered the county to begin a countywide reassessment by 2027 and complete it by 2032, replacing property values that have been in place as the county’s tax base since 2012. The order affects the owners of roughly half a million properties across Allegheny County.

It is intended to bring greater consistency to a system that has long faced criticism for being antiquated and unfair.

So what does that mean for you? Will your property’s assessed value go up or down? Could your tax bill change?

Here are four things you need to know about Allegheny County’s mandated property reassessment.

The basics: What is a reassessment, and why is it needed?

Property reassessments act as a reset of the values used to calculate property taxes. Allegheny County determines what properties are worth based on current real estate conditions, said Mike Suley, chair of the Allegheny County Board of Property Assessment Appeals and Review.

A property’s assessed value is then used by local taxing bodies — such as the county, municipalities and school districts — to calculate a property tax bill.

Property values change over time, as neighborhoods develop, homes get renovated or deteriorate and real estate prices rise and fall. Suley said that if assessed values stay frozen for years, they can become increasingly disconnected from what the properties actually are worth, which can create an uneven tax system.

“A lot of the assessments are way out of whack. You can go up and down any street in Allegheny County and see the disparity in the tax bills,” Suley said. “There are tens of thousands of people right now paying more than they should be paying, and they don’t even know it.”

For example, Suley explained that two people could live in identical 2,000-square-foot condos in the same building yet face drastically different tax bills. One owner might pay about $8,000 a year while the other pays $16,000, a disparity he said that does not make sense.

The misconception: Do reassessments guarantee a tax increase?

Suley said there is a common misconception reassessments are a guaranteed tax increase. He stressed state anti-windfall protections ensure the scale stays balanced.

Essentially when one thing goes up, another must come down.

Property taxes are calculated by the value of a property and the tax rate set by each taxing body. Allegheny County pays for county government services, a municipality pays for local government services and the school district pays for public schools.

The county determines an assessed value of the property. That value is different from what the property might be able to sell for today.

Under the current system, the county bases assessment on 2012 property values. A state-calculated percent called the “common level ratio” is used to compare a county’s older assessed property values with current open-market real estate prices.

Then, the three different taxing bodies can apply a millage rate to that assessed value.

A mill is $1 in tax for every $1,000 of assessed property value. So, if a property has an assessed value of $100,000 and the school district’s millage rate is 30 mills, the property owner would owe $3,000 in school property taxes.

Under state law, if aggregate assessed values rise, the millage rate must drop in proportion, yielding the same tax revenue and avoiding a windfall, Suley said.

Members of Allegheny County Council have been on a crusade for a bill that would standardize reassessments in the county to every three years beginning in 2028. This summer, council held a handful of public hearings at different locations around the county. During these meetings they stressed this point.

“Legally every single taxing body will have to, after the new assessed values hit, adjust the millage rate. They legally have to. So that’s your municipality, your school district, and the county,” said County Councilwoman atlarge Bethany Hallam, D-North Side, at a public hearing on June 3.

Suley said property values are not necessarily relevant to residents’ concerns about higher taxes.

If the millage rate were cut in half, a homeowner’s tax bill would generally fall by half only if the assessed value remained the same. Conversely, Suley said, if the millage rate increased, assessed property values could offset that increase.

This would mean a homeowner could potentially pay less in taxes despite a higher rate.

The math: Can you predict a property’s reassessed value using common level ratio?

Suley said there is no way to know how a property will be impacted by the reassessment — because the homes that will establish the market value for the mandated reassessment have not sold yet. Therefore, there is no way to calculate whether a property’s taxes will go up or down.

The ordered reassessment will replace the existing 2012 base values, with data to be gathered beginning in 2027 and completed within five years. The reassessment determines the home’s relevant market value based on sales occurring during that period.

While it may appear as though a homeowner could do the math to form a prediction, the county’s current 49.3% common level ratio cannot simply be plugged into a calculation. Part of the information needed — the market value — has not yet been determined.

“Look, I’m an expert. And I don’t know — I can’t predict what homes they’re going to be selling for in three, four years,” Suley said. “So anyone who’s doing that shouldn’t be doing that.”

The right to appeal: What if the county gets it wrong?

The first step in performing a new assessment is defining the county’s neighborhoods, so that an assessor understands which properties are comparable and how values vary from one area to another.

The assessor then looks at the condition of the property, its size, its physical characteristics and the quality of its construction. To do this doesn’t mean the assessor necessarily has to walk through the home, Suley said.

Instead, the information can be gathered by looking at the exterior, existing records and aerial photography. That information then is used to create a sketch of the property.

“In the 2012 reassessment, this is very important. We did a data collection. We changed 300,000 sketches before we assigned new values. So that means there were probably additions or something was taken off,” Suley said.

“We haven’t looked at these properties in 14 years. What we will find is the county has something listed as a vacant lot, and there’s a building on it. We don’t know that until we go look,” he continued.

Property owners will have the opportunity to review the information the county collects and request changes to any errors, such as an incorrect number of bathrooms or the size of the building footprint, before the new assessments are finalized.

Once the new assessments are certified, Suley said, property owners can appeal to the county if they still feel the information is incorrect. The homeowner will need to provide evidence that the assessor’s information is wrong with comparable property sales or an appraisal.

“The goal is uniformity,” Suley said. “If I have 10 identical cookie-cutter homes, all of them should receive similar tax bills.”