Through March 31, Allegheny County property owners have unusual opportunities to reduce their tax bills. But not everyone will benefit.
Unbalanced
How property tax assessments create winners and losers
Normally, owners have until March 31 of any given year to challenge the assessment underlying that year’s property tax bill. That remains the case this year.
But in addition to being able to challenge 2023 bills, property owners also have until March 31 to challenge their 2022 bills, if they desire. Links to forms to appeal both years are found here.
Why can taxpayers appeal two years in one season? Because a lawsuit successfully challenged the validity of data the county submitted to a state agency that calculates a ratio used in property tax appeals. County Council then voted to provide owners with a second chance to appeal their 2022 tax bills.
What did the assessment lawsuit do?
Allegheny County property tax bills are based on a decade-old mass reassessment using property values in 2012, except for properties for which the assessment has been modified through appeals. Owners, school districts and municipalities can file appeals — often after a property is sold — if they believe assessments don’t reflect market values.
The Common Level Ratio is a calculation meant to roughly equalize the assessments of similar properties whether they were last assessed during the base year (2012) or assessed more recently via appeals. The ratio is set by the State Tax Equalization Board based on data submitted by the county.
The lawsuit showed that the county submitted flawed data and pushed the ratio used in appeals of 2022 tax bills down from 81.1% to 63.53%. That means a property deemed, upon appeal, to have a recent market value of $100,000 would be taxed at $63,530, whereas it would have been taxed at $81,100 if the lawsuit had not succeeded.
The ratio applied to appeals of 2023 tax bills is set at 63.6%, though that could yet be subject to legal challenge.
The ratio affects only assessments determined through property tax appeals and is not applied to properties whose owners do not appeal.
Who will benefit from the new Common Level Ratio?
Potential winners include owners of properties that could likely be sold today for an amount less than, equal to or not much greater than their current county assessments.
To find a property’s assessment, go to the county’s Real Estate website, search up the address, and under the “General Information” tab, look at the “Total Value” figures under the “Full Base Year Market Value” headings for each year. Those “Total Value” figures are the basis for the assessment and tax bill. (Note: The “Total Value” on the right takes into account a Homestead Tax Exemption, which is relevant to the tax bill, but not to the likelihood of success upon appeal.)
Appeals go before the Board of Property Assessment Appeals and Review. To appeal successfully, an owner needs evidence of the property’s market value, which may include its recent sales price, a professional appraisal or records showing sales of comparable, nearby properties.
What are some examples of potential appeal outcomes?
Example 1: If the county assessment totals $100,000, and the appeals board decides that the property would sell for only $50,000, then under the new Common Level Ratio, an appeal could result in a new taxable value of around $32,000. For an owner-occupied house in the City of Pittsburgh, that cuts the total city, county and school district property tax bill from around $1,790 to around $230.
Example 2: If the assessment totals $100,000, and the board decides that the property would sell for that same amount, an appeal could result in a new taxable value of around $64,000. For a homeowner, that $1,790 bill drops to just over $960.
Example 3: If the assessment totals $100,000, and the board decides that the property would sell for $150,000, then an appeal could result in a new taxable value of around $96,000. That’s a reduced assessment even though the value has gone up, but it results in only around $90 in annual tax savings for an owner-occupied house. For some homeowners, that might not be worth the time and effort or the optional expenses of an appraisal and a lawyer.
The new ratio, as it stands today, won’t help owners whose properties could be sold in today’s market for a lot more than their county-assigned Total Value.
Example 4: If the assessment totals $100,000, and the board decides that the property would sell for $200,000, then an appeal could result in an increase in the tax assessment to around $128,000, resulting in a higher tax bill by about $650.
In fact, school districts often appeal — jacking up tax bills — when they see a property sale price that is far higher than the assessment.
The Allegheny County Controller has set up a worksheet to help property owners to estimate whether they might save money through a property tax appeal.
Which neighborhoods might be ripe for successful appeals?
Assessment appeal results depend on the evidence regarding the market value of the individual property. Properties in some areas, though, may be more likely to be good candidates for downward adjustments, for a variety of reasons. If a neighborhood’s market values have stayed close to 2012 values, then the new ratios driven by the lawsuit may result in reduced assessments for those who appeal. Similarly, if appeals filed in recent years by school districts or municipalities have pushed assessments up close to market values, then the new, lower ratio could bring tax bills down.
PublicSource and WESA analyzed 7,305 residential properties throughout Allegheny County which sold from Jan. 1, 2022, through Sept. 1, 2022, at what the county considers “valid sales” prices — meaning they are deemed representative of market values.
In the maps below, red areas saw sales prices that were relatively close to county assessments, suggesting that appeals are more likely to lead to tax bill reductions. Blue areas had 2022 sales prices that were significantly higher than assessments, suggesting that appeals are more likely to lead to higher tax bills. Areas in the middle are colored white. Gray areas saw fewer than 10 “valid sales” during the time period studied and were not analyzed.
Rich Lord is PublicSource’s managing editor. He can be reached at rich@publicsource.org or on Twitter @richelord.
Charlie Wolfson contributed.
This story was fact-checked by Betul Tuncer.
This package was produced in a partnership between WESA and PublicSource.
