City school taxes on the rise (Pittsburgh: public schools, live)

[gg]

Originally Posted by eschaton

- why can't we just ensure that when a house gets sold, the appraisal becomes the new value it's taxed at?

In my school district it does become the new assessed value because the school district will take you to court right away welcoming you to the new hood. I am not sure why they don't do that in the city? They should. Of course things like that have a downside for the real estate market. If you look around the city you will see a lot of homes that sold within the past year for a way higher value than the assessment.

[robrobrob]

Originally Posted by Bong477

PPS has generally not appealed under assessed properties as many suburbs do (maybe there are some exceptions, but its definitely not common). That could easily change though, so I wouldn't bank on it continuing to be the case.

A friend said that the PPS appealed a rental he has in Squirrel Hill when the reassessment came in too low. Ended up getting assessed fairly close to market value but it was still a huge jump form where it was.

Another friend, who used to live in the South Side, was so afraid of his tax bill after the reassessment that he moved. Basically, his taxes would have tripled. The funny thing was that when he sold the place last summer he got 100,000 more than the assessment. He was just so used to paying nothing in taxes due to a unbelievably low assessment that he just couldn't stomach the thought of actually paying taxes on the FMW.

My in-laws house is assessed at about 60% of the fair market value but the city didn't appeal it. I think the city was so overwhelmed with the task that the only focused on properties in expensive neighborhoods.

[Moby Hick]

Originally Posted by eschaton

This will probably result in some slowdown of real estate prices for a year or two, since it could be viewed as penalizing new homeowners over existing ones. But as more houses sold mid-assessment are added to the Grand List, most governments would feel pressure to lower overall rates. Within a decade it should be similar to the current spread, except more accurately reflecting market prices.

It would be viewed as penalizing new home owners over existing ones because it is. Houses aren't sold that often and it would take far more than a decade for all houses to turnover, especially after the system had been in place for a while. This would in effect be Prop 13 and you can read how much that has distorted both the housing market and the tax base in California. What happens if you make taxes lower for people who have lived in the same house the longest is that fewer people move. You get more sprawl, less mobility, more rentals, more relatively wealthy people paying less taxes, and few young families able to afford their houses.

Originally Posted by eschaton

IMHO, having the assessed values nowhere near appraised values of housing is part of the reason we got in such a huge mess to begin with....

Sure. I'm not disputing the mess it's made. Just pointing out that there are now easy, equitable solutions.

[I_Like_Spam]

Originally Posted by eschaton

As far as I have seen, the vast majority of reassessments were way below what market price would be. This is true virtually everywhere. Which is why once again I ask - why can't we just ensure that when a house gets sold, the appraisal becomes the new value it's taxed at? Then the new buyer has to take responsibility for the higher price. And the county only needs to reassess the rump of properties which do not change hands in ten years time.

I think most properties don't change hands in a 10 year period of time here in Pittsburgh. I read a stat a month or so ago which showed that 25% of Pittsburgh are still living in the same house they did in 1959.

The problem with your idea is that assessments are supposed to be based on the value of the property currently, not when its sold. If you are going to raise assessments on one house on a street, shouldn't the other properties also be jacked up in assessments in the interest of equity.

Further, there is a problem with sales at highly discounted prices (because of other considerations) or higher than usual prices because furniture and other items in the house were included but might not be considered legally "real property".

Assessments are supposed to be equitable, its a difficult kind of thing to achieve, but there is nothing wrong with assessed values being below market value as long as it is true with all of the properties in the county in an equal fashion

[Pghuser]

How about they start selling off vacant pieces of property that they own?

[I_Like_Spam]

Originally Posted by Pghuser

How about they start selling off vacant pieces of property that they own?

You have to have a buyer before you can sell.

Further, with this kind of sale, the school board wants to see the plan the buyer has for the building before they approve it and the whole thing is subject to years of debate and community meeting before it is actually enacted.

I don't expect to see the Schenley High property to move on to the tax rolls for many years, South Hills High must have been vacant for 20 years.

[eschaton]

Originally Posted by Moby Hick

It would be viewed as penalizing new home owners over existing ones because it is. Houses aren't sold that often and it would take far more than a decade for all houses to turnover, especially after the system had been in place for a while. This would in effect be Prop 13 and you can read how much that has distorted both the housing market and the tax base in California. What happens if you make taxes lower for people who have lived in the same house the longest is that fewer people move. You get more sprawl, less mobility, more rentals, more relatively wealthy people paying less taxes, and few young families able to afford their houses.

Maybe you didn't get my point. I still would like properties which don't change hands every decade to be assessed. But given we have a market value available for houses which do change hands between assessments, they should be valued at either their sale price (if an arms-length transaction) or the appraisal value.

Even though it would mean more of the tax burden between assessments fell upon newer homeowners, since these people would be aware of their tax burden before going into it, it would not come as a shock like reassessments often to today. As the assessments themselves should also be tied to market rates, the difference would be (at most) nine years worth of housing inflation, and the newcomers who come out the worst would pay at an unusually high rate the shortest period (since it would only be a few years until the reassessment of the "rump" of properties and the overall mil rate was lowered).

Another plus with this system is it removes the disincentive for shorter-term homeowners to fix up their property. In the current system, you could get your tax rate increased following the assessment if you fix up the front of your house nicely enough. But if you fixed up the house and then sold it to another buyer, they would bear the increased tax due to property improvements, rather than you.

Originally Posted by I_Like_Spam

The problem with your idea is that assessments are supposed to be based on the value of the property currently, not when its sold. If you are going to raise assessments on one house on a street, shouldn't the other properties also be jacked up in assessments in the interest of equity.

In terms of basic fairness, of course. In terms of neighborhood stability, probably not. Consider it this way - if I paid four times as much as my neighbor for an identical rowhouse (albeit purchased at different times), why shouldn't I be taxed at a higher rate, given I am quite likely someone with a higher income? The real estate value for any house which isn't sold is after all notational. If every person in a neighborhood sold at once, there would be a glut, and no one would get the "market" rates anyway.

Originally Posted by I_Like_Spam

Further, there is a problem with sales at highly discounted prices (because of other considerations) or higher than usual prices because furniture and other items in the house were included but might not be considered legally "real property".

Provided only arms-length transactions are considered (to avoid people using the system to sell houses below market rate to relatives and avoid taxes) issues such as that should cancel each other out.

Originally Posted by I_Like_Spam

Assessments are supposed to be equitable, its a difficult kind of thing to achieve, but there is nothing wrong with assessed values being below market value as long as it is true with all of the properties in the county in an equal fashion

This is true (although it makes it confusing needlessly for homeowners). But as I said, there is no way that assessments just had a universal discount off the market rate. From what I've seen, declining areas didn't have their rates decline enough, and improving areas certainly didn't have theirs rise enough.

[Moby Hick]

Originally Posted by eschaton

Maybe you didn't get my point. I still would like properties which don't change hands every decade to be assessed. But given we have a market value available for houses which do change hands between assessments, they should be valued at either their sale price (if an arms-length transaction) or the appraisal value.

I had indeed missed that you wanted a reassessment every decade, but I see it now. Sorry. That's not a bad plan. However, I'd like to see the actual ability to reassess happening first, because if that part gets shut down, it would be a disaster.

[I_Like_Spam]

Originally Posted by eschaton

In terms of basic fairness, of course. In terms of neighborhood stability, probably not. Consider it this way - if I paid four times as much as my neighbor for an identical rowhouse (albeit purchased at different times), why shouldn't I be taxed at a higher rate, given I am quite likely someone with a higher income? The real estate value for any house which isn't sold is after all notational. If every person in a neighborhood sold at once, there would be a glut, and no one would get the "market" rates anyway.


.

New homeowners are already responsible for a rather hefty real estate transfer tax currently, if you bought a home for $200k this year, you paid a lot more for this tax than your neighbor who bought in 1955 for $4500.

[jjd76539]

I recently moved back to Pittsburgh and purchased a home and yes real estate transfer taxes took me back a bit..In the previous city I lived in assessments was a joke. The county/City would have two people walk each side of the street at a very fast pace. And if your property had a nice appearance you was going to get raised up on taxes. If a property looked like crap and no one was residing at the property it would stay the same.. And this is the kicker these places are uninhabitable but yet they get the same assessment for years and there is no way these properties was even worth 25% of the assessment.. And many of these properties have liens on them and the counties sell those debts to a second party to collect.. one of these companies attempted to go after me for property a family member owned LOL.. When I called them and told them my name is not on that deed so you do not have a case what so ever. They started talking on how the property would be an asset to me if I took it over LOL..They knew there was no chance in hell on getting me to pay the lien/back tax debt they bought off the county.. After years living in the mid south I am glad back up here and deal with the taxes here LOL.