Property Reassessment and implications for home purchase (Pittsburgh: house, school district)

[Bong477]

Can someone please explain to me what is currently going on with property reassessment? Specifically, I am looking at some of the more expensive homes (500k-800k or so) in the East End, there is some variability but most of these currently have taxes in the 8k to 14k range currently which is generally about 1.5-1.8% of the current listing price/year. If you apply the current tax rates for the city of Pittsburgh (which is about 2.95% of the 2002 value) on the listing price which is presumably more or less the amount the house is currently worth, the tax goes up by a lot, 1.5-2x as much. The changes the calculation as to what is and isn't affordable significantly as the same monthly payment buys you 10-15% less house.

I understand the basics of the current base year system and in theory the anti windfall law... but does anyone understand what the practical implications of this actually are yet? I would imagine in the city you have more of the mixed property values with some going up and some going down as compared to say Mt. Lebo which is a little more homogenous and likely (barring significant home improvements) homes appreciated similiarly. If we don't know yet, is there some point that we will know?

[BrianTH]

Unfortunately we can only make an informed guess at total appreciation in any given jurisdiction until they release the actual numbers.

If I had to guess, I would guess the total appreciation in the City of Pittsburgh is going to be around 30% to 40%, and the new tax rate will end up around 2.15% to 2.3%. That just happens to roughly split the difference between what those properties in question are currently paying and what they would end up paying after the assessment but without a tax rate reduction.

Again, you have to apply a large margin of error to guesses like this. On the other hand, I'm not just pulling that out of nowhere--there are many different sources for estimating total appreciation from 2002 to 2010, and something like 30-40% is a reasonable estimate given those sources.

[gg]

We will know the situation in July, unless we get lucky and there is a delay. It is a crap shoot and some people will lose their homes. I am sure some property owners are going to get crushed, unless they have connections.

[Debbie1125]

Originally Posted by h_curtis

We will know the situation in July, unless we get lucky and there is a delay. It is a crap shoot and some people will lose their homes. I am sure some property owners are going to get crushed, unless they have connections.

It sounds like Pittsburgh's property tax assessments are just as screwed up as the system where I live.

The only difference is, from what I am reading in the posts on this topic, that the school district has more power and influence over appeals and assessments.

[BrianTH]

The base-year system is indeed a screwy one, and it actually took a court order to get this reassessment.

But ultimately, the fundamental problem is relying too much on property taxes for the funding of local governments and schools. Even an ideal assessment system can't overcome that problem.

[Bong477]

So July 2011 is the (current) target date for an update on this situation?

[BrianTH]

Originally Posted by Bong477

So July 2011 is the (current) target date for an update on this situation?

Sorta. As I recall, property owners are supposed to get preliminary assessments in the mail in July through September. Then there will be some hearings and perhaps adjustments. Final assessments will be certified in January of 2012. And I actually have no idea when we will find out how the tax rates will be changed.

[mariya5321]

In UK, now is a best time for property reassessment. It’s time to save tax.