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How Far "Out Of Line" Should Our Assessment Be
In Order To Justify an Assessment
Appeal?
Can The Assessment Be Increased As A Result Of An
Assessment Appeal?
If I Receive A Notice Of A Proposed Assessment Change,
What Is The Deadline For Filing An Appeal?
Is There A Filing Fee To Initiate An Appeal Before A
County Board Of Assessment Appeals?
Are There County Appeal Forms And Administrative Appeal
Regulations?
Who Is Qualified To Present Valuation Evidence At An
Assessment Board Hearing?
What If The Taxpayer Disagrees With The Decision Of The
County Board Of Assessment Appeals?
What If The Taxpayer Disagrees With The Decision Of The Court Of Common Pleas?
Each of Pennsylvania’s 67 counties is a separate assessing district with its own assessment office. A few third class cities have their own assessing office separate from the county’s. The assessor determines each tax parcel’s actual value which theoretically is to be based upon fair market value. Except in circumstances involving subdivision or new development warranting a change in an individual assessment, actual values of tax parcels are established when comprehensive county-wide reassessments occur. These actual values are established as of the reassessment year (the base year). In most counties, comprehensive reassessments are infrequent; thus, the base year actual values often are out of date—some by more than 20 years. For this reason, county base year actual values often bear little relationship to current market values.
After a county assessor has determined the actual values, each parcel is multiplied by the county’s official predetermined ratio in order to produce individual assessments. Each county arbitrarily establishes its own predetermined ratio and these can range between 20% and 100% of the "actual values." Conclusion: In most counties, property assessments provide no guide to a tax parcel’s current market value; and this confusion principally results from out-of-date "actual values" and arbitrarily-selected predetermined ratios.
UNDER WHAT CIRCUMSTANCES CAN AN ASSESSMENT BE CHANGED?
In absence of a comprehensive county-wide reassessment of all tax parcels, an individual property lawfully can be reassessed only in limited circumstances: a subdivision of the property, a physical change in the real estate (such as new construction or removal or change of existing improvements), or an appeal of the assessment of the subject property. A sale of the subject property, standing alone, cannot lawfully trigger a reassessment, regardless of the indicated purchase price.
HOW CAN I LEARN THE AMOUNT OF MY ASSESSMENT?
Each tax bill will indicate the assessed value upon which the millage rate is based. Sometimes business properties comprise more than one tax parcel. If so, the total of the assessments must be determined. In the event of a changed assessment, the assessor will send a written notice which will indicate the prior and the new assessment.
HOW CAN I LEARN IF OUR PROPERTY IS FAIRLY ASSESSED?
Three things, at minimum, must be known: (1) the assessment; (2) the county’s current applicable assessment appeal ratio; and (3) the current fair market value of the property. The total assessment, when divided by the county’s current applicable assessment appeal ratio, will indicate the current market value implied by the assessment (the implied value). A comparison of this assessment-implied value with the estimated current market value will indicate if the property assessment is fair or non-uniform. See Testing The Fairness Of Your Assessment. If the property owner does not know one or more of these facts, professional assistance should be sought from a qualified appraiser and/or attorney.
It is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Simply stated, this is the current "real world" value which must be determined in an appeal of an individual assessment. This market value is then multiplied by the applicable assessment appeal ratio to produce the lawful assessed value.
HOW FAR "OUT OF LINE" SHOULD OUR ASSESSMENT BE IN ORDER TO JUSTIFY AN ASSESSMENT APPEAL?
Assessment appeals should not be filed unless there exists a good faith basis to conclude that the property significantly is over-assessed. Each taxpayer must determine the extent to which the non-uniformity of an assessment is considered significant. However, this determination should be based upon a realistic estimation of the subject property’s current market value. Most business taxpayers are good community citizens and do not want to file appeals unless the case reasonably is clear.
CAN THE ASSESSMENT BE INCREASED AS A RESULT OF AN ASSESSMENT APPEAL?
Yes. On appeal, the entire value is placed in issue and the assessment board (or court on subsequent appeal) has the power to reduce, increase or leave unchanged the assessment. For this reason, a realistic estimation of the property’s current market value should be determined before any appeal is filed.
IF I RECEIVE A NOTICE OF A PROPOSED ASSESSMENT CHANGE, WHAT IS THE DEADLINE FOR FILING AN APPEAL?
Assessment change-notices usually specify the time within which an appeal should be taken to the assessment board. However, the Judicial Code specifies that appeals of administrative determinations must be taken within 30 days of the issuance date (i.e., the mailing date of the notice). To be conservative, this should be not later than 30 days following the date printed on the notice. Although some administrative decision notices specify a 40-day appeal period (based upon assessment statutes pre-dating the Judicial Code), the 30-day period should be observed.
HOW DO I APPEAL MY ASSESSMENT?
Each of Pennsylvania’s 67 counties has a Board of Assessment Appeals (called the Board of Revision of Taxes in Philadelphia County and in Allegheny County called the Board of Property Assessment, Appeals and Review) to which initial assessment appeals must be filed. In general, administrative assessment appeals are filed for one of two reasons: (1) resulting from notice to the taxpayer of a changed assessment; or (2) an annual appeal. In the case of an annual appeal, different filing dates exist for different classifications of counties. These strictly must be observed. See County Assessment Office Information.
IS THERE A FILING FEE TO INITIATE AN APPEAL BEFORE A COUNTY BOARD OF ASSESSMENT APPEALS?
The assessment statutes do not specify or authorize a filing fee. However, some counties have imposed filing fees. Inquiries should be directed to the assessor or the board of assessment appeals of the particular county. See County Assessment Office Information.
ARE THERE COUNTY APPEAL FORMS AND ADMINISTRATIVE APPEAL REGULATIONS?
Yes. Most counties have their own individual forms of appeal and, also, appeal regulations. These can change periodically, depending upon the individual county. Thus, inquiry should be directed to the appropriate county assessor and/or board of assessment appeals. See County Assessment Office Information.
This is an issue of substantial uncertainty in Pennsylvania at the present time. Some counties require business appellants to file and present appeals through licensed attorneys. Some counties have no regulations on the subject. Thus, a prospective appellant should contact the relevant county to determine whether or not attorney representation will be required to file and present the appeal. See County Assessment Office Information.
WHO IS QUALIFIED TO PRESENT VALUATION EVIDENCE AT AN ASSESSMENT BOARD HEARING?
In general, assessment board hearing proceedings are informal and do not follow court rules of evidence. However, some assessment boards have issued regulations which require written valuation opinions by certified Pennsylvania appraisers in the case of business property appeals. Other counties permit the testimony of any person having a reasonable knowledge and basis for expressing an opinion of value. Individual property owner appellants always are qualified to express an opinion of value as to their properties, but the weight accorded to such an opinion is at the discretion of the tribunal.
HOW DOES THE ASSESSMENT BOARD DETERMINE MY APPEAL?
After hearing, the county assessment board is required to make two determinations: (1) the current market value of the subject property; and (2) the applicable assessment appeal ratio. This ratio will be either the county’s predetermined ratio or its current common level ratio. See Testing The Fairness Of Your Assessment. By multiplying the current market value and the county’s current applicable assessment appeal ratio, the correct lawful assessed value will be determined. Example: If the current market value is determined to be $1,000,000 and the applicable assessment appeal ratio is 37.5%, the lawful assessment will be $375,000 ($1,000,000 x .375 = $375,000).
HOW IS MARKET VALUE DETERMINED IN AN ASSESSMENT APPEAL?
The assessment statutes provide that there are three methodologies to determine market value: (1) capitalization of net income; (2) reproduction/replacement costs, less depreciation and obsolescence; and (3) recent selling prices of reasonably comparable properties. Although an appraiser should consider all three of these approaches, he/she is not obliged to develop all approaches if one or more is/are not considered appropriate to the particular property. Where sufficient evidence exists, most tribunals express a preference for the sales comparison approach. In the case of commercial or rental real estate, the income approach is reliable. Except for relatively new properties of modern design, the cost-depreciation approach usually is given the least weight because of the subjective uncertainties in estimating accrued physical depreciation and obsolescence.
WHAT IF THE TAXPAYER DISAGREES WITH THE DECISION OF THE COUNTY BOARD OF ASSESSMENT APPEALS?
Within 30 days following the board decision notice, the taxpayer may file an appeal to the county court of common pleas. The court will proceed to hear the appeal de novo (i.e., anew, and without any of the parties being bound by the record or presentation before the assessment board). The court will determine the lawful assessment by the same methodology as required of the assessment board, i.e.: (1) determining the market value of the subject premises; and (2) multiplying that by the current applicable assessment appeal ratio. Usually, in assessment appeals, the applicable assessment appeal ratio is stipulated and is not a contested issue. In most court appeals (as in most appeals to an assessment board), the major focus of attention is upon the correct valuation of the subject property.
WHAT IF THE TAXPAYER DISAGREES WITH THE DECISION OF THE COURT OF COMMON PLEAS?
An appeal may be taken to the Pennsylvania Commonwealth Court. However, this appeal will be taken on the record of the court below. Unless the appellate court determines that the lower court abused its discretion, it will not overturn determinations of witness credibility and findings of fact. Issues on appeal will be restricted to whether or not the lower court committed an error of law (i.e., applying an incorrect legal inference to the underlying facts).