Tax Assessment

[MixedFeelings]

For sure Sq. Hill seems like a good deal to us - coming from CA - it is embarassing how much we pay for houses out here.

Also, in doing the worst case scenario calculations Hopes suggests, you might find that full reassessment to sale price values don't sting quite as bad at they look: remember you can decuct these property taxes from your federal taxable income value. So, if you are in the tax bracket we are - this helps a lot. Rough figures show that a $10,000 increase in local property taxes will actually cost us some $6,000.

It's not pretty, but $6,000 is sure better than $10,000.

[bboy36win]

So ... if I buy a house in Allegheny County in 2007 for, say, $200,000, and the house I'm buying has a 2002-base-year assessed value of, say, $100,000, then the assessed value of my home (for tax purposes) will not change, and I will pay the same propertay taxes as what the seller paid ... until the whole county reassesses ... at which time the school districts and municipalities are legally required to adjust their millage rates down to compensate (unless they have otherwise independently voted to increase taxes in their district).

Is that right?

[Hopes]

Originally Posted by bboy36win

Is that right?

Not necessarily. Just plan on eventually having to pay taxes based on the purchase price, and you'll be financially prepared.

[MixedFeelings]

You write: "So ... if I buy a house in Allegheny County in 2007 for, say, $200,000, and the house I'm buying has a 2002-base-year assessed value of, say, $100,000, then the assessed value of my home (for tax purposes) will not change, and I will pay the same propertay taxes as what the seller paid ... until the whole county reassesses ... at which time the school districts and municipalities are legally required to adjust their millage rates down to compensate (unless they have otherwise independently voted to increase taxes in their district).

Is that right?"

Yes - the assessed (2002) value does not automatically change to the new sale price.

BUT there is one more way your taxes can go up (and is currently the most common way): you get your property's assessed value challenged by the school board (or someone else) and you lose that challenge. However (as we have heard) many who have been through this still ultimately had the value of their house rolled back to 2002 values thanks to another court ruling. My biggest confusion is why these challenges are still going on even though most of the assesed value increases have been set aside.

AND, while I agree with Hopes that it is best to be prepared to pay the taxes on your full purchase price, there seems to be significant evidence that: 1) you won't have to pay this amount right away, 2) you may go multiple years without paying it, and 3) the whole system may be forced to change within the next 3-5 years, in which case there is no telling what kind of value and tax rate you will have; could be good, could be bad. 4) If the 2006 law is still in effect, your local taxes cannot increase in dollar value unless a local tax increase vote passes first.

Checks and balances, sort of?

[bboy36win]

Originally Posted by MixedFeelings

BUT there is one more way your taxes can go up (and is currently the most common way): you get your property's assessed value challenged by the school board (or someone else) and you lose that challenge. However (as we have heard) many who have been through this still ultimately had the value of their house rolled back to 2002 values thanks to another court ruling. My biggest confusion is why these challenges are still going on even though most of the assesed value increases have been set aside.

Yes, I find the while "challenge" thing to be confusing, as well. Perhaps the courts did, too.

Seems awfully arbitrary to me. (I'm picturing a fresh-faced county employee spending his days at the courthouse's recorder of deeds, looking over real estate transactions, hoping to find one whose sale price represents a large enough increase over the 2002 assessed value that he can shout - with joy - "Here's one we can go after!").