Are school tax appeals still an issue? (Pittsburgh, Butler: assessor, buying a house)

[BrianTH]

Originally Posted by Hopes

If my budget was tight, I would only buy a house if I could pay the taxes based on the purchase price. It's a safe way of protecting one's financial future.

I think that is a good starting point. I'd just note that in the future your tax basis won't be limited to your purchase price if the taxing jurisdiction does periodic reassessments.

[greg42]

It's tough to say whether it would be a big concern. If you haven't already, it helps to be familiar with the county web sites. Allegheny and Beaver (not sure about others; those two I've used) have places on the site where you can look up the last sale price and date and such for the real estate. You need the street address to look it up.

Now several years ago Allegheny County went through a big reassessment. The idea was to keep it up to date and go to a market price setup, as I recall. But then that has been tinkered with and the whole thing is currently pretty fubar. In the surrounding counties, I have not heard of big reassessment issues that make news, but there are typically changes to the rate (known as "millage" because it's expressed in "mils" aka thousandths of a dollar) in various school districts. That can change every year.

When I bought my house in Beaver County 6 years ago, I can't say that I felt the assessment changed a lot. Although the previous owners owned it only for about 3 1/2 years, so there wasn't much change to be had. It might be more of an issue if you're buying from someone who has owned for 20 years or such, when the sale price would have been significantly lower. Again, you can check this on the county web sites. Note that this kind of long-term ownership thing should NOT cause an issue in Allegheny County because of that reassessment, but that doesn't mean there can't be changes.

The assessed value in Allegheny County will look like a purchase price, but the assessed value in other counties may not. My assessed value in Beaver County looks something like 1/4 or 1/2 the value of the place (I can't remember which), so this is more difficult to decipher. My understanding is that this is not because they haven't changed the values in x years but because they purposely have it set at x% of the value. But, I could be wrong on that point.

The real estate agent should be able to get a decent estimate of the total annual tax bill. Although this can change after you buy, of course, you should be able to get a reasonable idea. If you're in Allegheny County and they tell you the tax bill is $1000/year, there's something wrong! Mine is, eh, about $2000-2200. I would think in your price range you need to be budgeting around $250/month ($3000/year) for escrow including the homeowners insurance. If you get far enough out in Butler County or maybe some areas of Beaver or Washington, that bill may be lower. That number is probably worst case.

[bboy36win]

My county has a base year of 1959! If PA forces them to reassess, I would hope there is a re-evaluation of the millage rates, because the county and school districts have been raising their millage rates for the last 50 years to compensate for the lack of a property reassessment. I suppose a reassessment from 2002 would be a little less painful, but painful nevertheless to those whose properties have appreciated considerably in the last 7 years.

[BrianTH]

Originally Posted by bboy36win

I found the state supreme court ruling to be very confusing. I believe it states (and I'm paraphrasing here) "The 2002 base year system is not unconstitutional .... but you need to reassess."

Seemed like a contradiction to me. What am I missing?

So in constitutional law there is a distinction between something that is facially unconstitutional and something which can be unconstitutional as applied. The conceptual difference is that something which is facially unconstitutional is always unconstitutional, where as something which can be unconstitutional as applied may not always be unconstitutional. The practical legal difference is that once something is held to be facially unconstitutional, it makes it pretty simple to win future cases of the same kind. With an as-applied rule, there are usually some additional facts or circumstances you have to prove in future cases in order to win.

Anyway, the PA Supreme Court held the Allegheny County base-year system was unconstitutional as applied. Basically, they reasoned that while a base-year system may not immediately violate the proportionality clause, eventually it will, and that had happened in Allegheny County. Hence, Allegheny County could temporarily comply with the constitution by reassessing and resetting to a new base year, but eventually the same problem would rearise. And as a final note, the PA Supreme Court urged the General Assembly to take action to adopt a constitutional framework (e.g., it could establish a maximum reassessment period).

[Hopes]

Originally Posted by BrianTH

I think that is a good starting point. I'd just note that in the future your tax basis won't be limited to your purchase price if the taxing jurisdiction does periodic reassessments.

True. That's my point. Taxes will go up.

People are better off planning their budgets according to purchase price, at least, because that's the foreseable future. Taxes might even go higher than that some day.

I guess I'm sort of blown away by these posts where people say they can only afford a house if the taxes stay at what they're currently at.

To me, that means the people can't afford that house---because property taxes will always increase someday.

[rapchef2]

Originally Posted by Hopes

If my budget was tight, I would only buy a house if I could pay the taxes based on the purchase price. It's a safe way of protecting one's financial future.

.

So could someone fill me in on how to calculate the taxes so I could base it on the purchase price rather than what is stated in the listing? I had been using the taxes included in the listing because several realtors I've dealt with in both PA and NY stated that your taxes rarely go up until the county does a county-wide reassessment. So I thought the taxes would just stay the same until then (except for the yearly increases in tax rates that they always add).

So being a first time home-buyer, I don't know who all taxes you (county, township, school, any others?), and what percentages to use to calculate a new tax total. If someone could help direct me to the figures I need to use, it would be greatly appreciated. One of the houses we have an offer on and are waiting for an answer is in Center township, our backup house is in Mars (Butler county).

Thanks so much!

[rapchef2]

Oh, and it's not that we can't afford the mortgage if taxes go up. I'm factoring tax increases into what we can afford. The problem is that if the taxes jump $100 a month after we purchase it, that's more than what I'm factoring in for gradual increases.

[Hopes]

Now you're thinking right! Don't believe realtors when they tell you taxes rarely increase. Always calculate what the taxes would be if they were raised to the purchase price. If they don't get increased, you have a nice cushion in your budget. Doing it the other way---hoping your taxes don't go up, puts you in a positon where you could end up very uncomfortable financially.

And $100 a month increase is what I experienced when there was a reassessment years back. Just warning you. There was nothing gradual about it. That's what happens when assessments get frozen in a certain tax year. Eventually, reassessments occur and there's a huge jump. You will rarely experience anything gradual with your property tax increases. In essence, hoping the taxes stay at 2002 values is setting yourself up for a sudden tax increase without warning. You need to take that into consideration when you're computing your asking price.

If nobody has helped you with the tax calculations by tonight, I'll do some research and help you with those two areas. You could also call the municipal offices for those areas. Someone there could help you understand the taxes.

[Copanut]

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The two townships you mentioned are both in Butler county so the school district coming after you for higher taxes doesn't happen there. Just look up the assessment of the property, multiply the millage rates, and you'll have your answer. To the contrary, most agents/brokers/Realtors do not lie. The taxes have to be fairly exact to determine the total monthly mortgage payment. The amount on the listing sheet may be lower as you get a discount for paying early.

Good Luck.

[greg42]

Originally Posted by rapchef2

.

So could someone fill me in on how to calculate the taxes so I could base it on the purchase price rather than what is stated in the listing? I had been using the taxes included in the listing because several realtors I've dealt with in both PA and NY stated that your taxes rarely go up until the county does a county-wide reassessment. So I thought the taxes would just stay the same until then (except for the yearly increases in tax rates that they always add).

So being a first time home-buyer, I don't know who all taxes you (county, township, school, any others?), and what percentages to use to calculate a new tax total. If someone could help direct me to the figures I need to use, it would be greatly appreciated. One of the houses we have an offer on and are waiting for an answer is in Center township, our backup house is in Mars (Butler county).

Thanks so much!

Here's where you can look up the Beaver County house: WebFormDisclaimer That will give you the assessment value right now. I can't say that it won't change. I don't know what mine looked like before I bought it. All I can say is when I look at mine, it shows a "market" and then "assessed" which is 1/2 the market value. But the market says $52,000, and I bought my house for $114,000 in 2003. The Beaver County site does not give things like the last tax bill, etc, though you can see the ownership history. That house should have three taxes: one from the county, one from the township and one from the school district. Keep this in mind: Center Township and neighboring Monaca have just become the first school districts in PA to merge in about 20 or 30 years, I think it is. How this will affect things going forward I don't know. Current Beaver rates are here: http://www.co.beaver.pa.us/Assessment/millage2009.pdf

Butler County also has a handy chart for your rates. Butler County: Millage Information As you can see, it says assessment is 100% of 1969 value. It sounds like the assessment wouldn't change. My hunch is that is the case in Beaver as well but I don't know it for certain. The assessor's office probably knows; it's just not something I've bothered to learn the details about. Unfortunately for Butler I don't see an immediate way to find out what that 1969 value is for a given house.

Personally, knowing nothing else about the houses, I'd rather live in Mars than Center Township, although most parts of Center are arguably more convenient to Leetsdale. Here's hoping one of those properties works out for you! :-)

EDIT: I assumed Center Township, Beaver County, though there is also one in Butler. At worst, it just means the Beaver County info is superfluous. I'll leave it just in case. Center Township, Butler, would be much more inconvenient to Leetsdale, that's for sure!