Can You Explain PGH Property Taxes? (house, buy, school districts)

[Hemingway]

Go to this website FAQ - Business & Wage Tax to clarify the City Wage tax (AKA Earned Income Tax)....It is very confusing for most people....

I just filed for a refund for 3 years worth of the 3% wage tax that had been paid to the City,we paid that plus 1% to our own our own Municipality (Plum)!

Beware....most people have no clue what it is, and who it goes to. I went down to my local Earned Income Tax office, and even they had NO clue exactly where the money goes....one said to the town, while a second person said it goes to the City.

Take the time to educate yourself about this prior to choosing a home.

As to property taxes...you pay a millage based on 100% of the assessed value . Each Municipality has a millage, which you can then multiply by the intended sale price of your home. Example?

Plum Boro-
Borough - 3.30 mills
County - 4.69 mills
School District - 21.2 mills
Total Tax Millage - 29.19 mills
Sale price-$200,000
.02919 x 200,000=5838

Now, that being said...all existing homes property taxes are frozen at the base year 2002, so I think if your intended home was built prior to that, they may just keep that assessment...people have requested that their assessment be rolled back if the county ups their taxes after a sale, most people I have spoken to have done this, with no problem...there is a form somewhere on the property assessment website. HTH

[scrapp]

Originally Posted by Hemingway

people have requested that their assessment be rolled back if the county ups their taxes after a sale, most people I have spoken to have done this, with no problem...

This is a bit misleading. You can appeal the assessment, but there is no guarantee you'll get a roll back. The result of an appeal appears to depend on which member of the appeals board handles the case (i.e. it is random, and thus unpredictable and unfair).

Some board members will roll the assessment back all the way to 2002. Others leave it at the most recent sale price, even though that was not the intent of the county goverment when they adopted the 2002 base year! And it is also possible to end up with a partial rollback.

Even if a homeowner wins his or her appeal and gets a full rollback to the 2002 value, the taxing bodies have 30 days to appeal that result to the Board of Viewers ( Board of Viewers*|*Home (http://www.alleghenycourts.us/civil/BOV/default.asp - broken link) ). To quote that web site:

Appeals from the Board of Property Assessment to the Court (Board of Viewers) are considered to be “de novo”, which literally means “trying the matter anew, the same as if it had not been heard before and as if no decision had been previously rendered.”

In other words, if the taxing body doesn't like having the assessment rolled back to 2002 they appeal it to the Board of Viewers and basically force the homeower to throw out the appeal result and start over again in a new court. Of course the system is uniform, so it can go the other way (e.g. if a homeowner does not get any roll back from the appeal board, then he/she can appeal that to the Board of Viewers too...).

Is this happening? You better bet it is! As of right now there have been 6253 cases sent to the Board of Viewers this year so far (compared to 1281 for all of last year, before the 2002 base year appeals started being processed).

Many school districts are continuing to appeal assessments based on current market purchase prices, despite the base year. Sometimes they win, sometimes they lose, but it must be worthwhile for them because they keep doing it.

The bottom line here is that if you are planning on buying property in Allegheny County, be prepared to pay property tax on the sale price because the appeal system is totally unpredictable and the future of the base year system is in question (PA supreme court case is pending).

If you live in the city of PGH (29.41 mils), that means take your sales price and multiply it by 0.02941 to determine the yearly tax.

[Hemingway]

There is NO doubt that the Allegheny County Tax Assessors office is a total mess....no one (not even the office itself) will dispute that. We have homes here built in 2003 that are still only being taxed on the land (no improvements)...yet homes built in 2007 that are paying on the full value. Every single person in our neighborhood (several hundred homes) requested a return to 2002 assessment, and it was it was granted quickly. I have no further information beyond that.

I am from NJ, it has been quite the learning experience trying to understand how we are taxed here. I'll NEVER understand that Earned Income Tax...and the "City" Tax (aka $52.00)? don't even get me started, the office in CHARGE of it couldn't even tell me exactly where it goes! (They gave up and are returning 3 yrs worth of that too!)

As you can see, I have made ALOT of phone calls trying to figure this stuff out!

FYI to the OP-your zipcode makes a big difference here...some suburbs are "part" of the city municipality, others are their own entity, as in my own Plum Boro...that is also listed on that website I posted.

[krw]

Originally Posted by Dan Corcoran

The Allegheny County tax assessor has a very informative website that provides the property tax rates for each township/area of the county, as a percentage of the assessed value.

My questions are these:

- is the assessment based on 100% of the assessed value or on some lesser percentage (as is often the case in other cities)?

- when you buy a house, does that trigger an automatic reassessment?

- if so, is the new assessment automatically equal to, or very close to, the purchase price?

I know most folks can guess at an answer, based on their experience, but I'd prefer if you answer only if you have some professional knowledge of the subject. Thanks!

(Obviously, the reason for my question is to enable me to understand whether the taxes quoted in real estate ads, for the existing owner, are anything like the taxes I'll be paying as a new buyer of the property).

You've been given good information about taxes in Pittsburgh. Each community, including "City of Pittsburgh", has a different structure/rate for taxation. However, I thought you might be interested to know that some of our urban communities (downtown, Strip District, Lawrenceville, etc.) have recently qualified for a significant 10-year tax abatement on NEW Construction or significantly re-hab'd properties. This initiative waives city, school (the biggest bite) real estate taxes on the first $250k of property value for 10 years! At maximum $250k, that's a savings well in excess of $6,000/year..or $500/month!! (More buying power.) Allegheny County (Pittsburgh's location) is expected to enact the abatement as well, which will add another $1172.50/year savings.

The reason for this tax initiative is obvious...the region wants to improve existing city neighborhoods by making them more affordable and attract development of new housing stock. Downtown has several new projects that qualify for the abatement (not all do) with prices from the mid $200's (not many of those yet) to over $1m. However, the Strip District is emerging as a really cool neighborhood as well - The Cork Factory has new rental units/retail spaces, but there is an upcoming project across the street that is a warehouse/factory conversion called the "Otto Milk Factor", which will have more affordable condominiums available for purchase from the $170's and up. This project qualifies for the tax abatement, so buyers of units costing up to $250k will pay NO real estate taxes for 10 years, leaving a mortgage payment at or lower than the market rental rates.

BTW - I should tell you that I am a realtor who specializes in Pittsburgh urban, adaptive re-use real estate development projects (my passion...not into tract housing that levels the landscape, but dedicated to re-use of Pittsburgh's heritage stock of significant architecture!). I sold this property to a developer who shares 'the vision'. Thought I should reveal my bias . We won't begin marketing the project until Jan/Feb 2008...so you heard it first here! (Occupancy expected by late summer/fall 2008.)

[Hemingway]

Wow! That initiative is going to do alot for the Urban neighborhoods! I am going to pass this along to a Niece who currently rents a house in Regent Square (I think that is the neighborhood). She is a Graduate student at Pitt, and works there too. Is there any websites that I can direct her to for more info?

[scrapp]

[quote=Hemingway;2128822]There is NO doubt that the Allegheny County Tax Assessors office is a total mess....no one (not even the office itself) will dispute that. We have homes here built in 2003 that are still only being taxed on the land (no improvements)...yet homes built in 2007 that are paying on the full value. Every single person in our neighborhood (several hundred homes) requested a return to 2002 assessment, and it was it was granted quickly. I have no further information beyond that.
/quote]

Yeah, it is random so I'm not surprised about your neighborhood. Part of it depends on how agressive your school district is about filing appeals. It sounds like your school district is not very agressive if you've got 2003 construction taxed at pre-construction assessment values. Lucky you!


Here is a little game you can play to collect more information:

Go to the County Prothonotary web site prothonotary.county.allegheny.pa.us and click on "Case Search".

Pick a radom number between 1 and 6253 and use it to make a BV-07 CaseID. For example, if you pick 4543 then make your CaseID BV-07-004543. Enter your caseID into the Search Form and click "OK" at the bottom.

You'll get a docket sheet for that case. Look at the list of Litigants which will include the Property Owner, the County, the School District, and the Municipality. You can usually tell if the property is residential or commercial by the Property Owner. The Litigant labeled "Appellant" is the one who initiated the case.

Now hop over to the County Real Estate Web site Allegheny County Assessment and look up the property you got from the docket sheet.

You can compare the On the "General Information" tab get the State Code, Homestead info, Sale Date, Sale Price, and 2007 Market Value. Then click on the "Comparables" tab to get the original 2002 Base Year assessment (the bottom left number on the chart).

Now you can reconstruct the assessment story for that property.

If you use the example id BV-07-004543 you'll get a house in the city that had its 2002 base year assessment of $494K, sold in mid-2002 for $675K and got appealed up to that value. It looks like the recent base year appeal reduced the assessment from $675K to $641K rather than the $494K 2002 base year value they were hoping for. So the County has appealed this to the Board of Viewers. Note that an assessment of $494K will cost you about $14K/year in taxes, but an increase to $641K will cost you almost $19K/year.

[Hemingway]

Wow Scrapp, Interesting info!

[krw]

Originally Posted by Hemingway

Wow! That initiative is going to do alot for the Urban neighborhoods! I am going to pass this along to a Niece who currently rents a house in Regent Square (I think that is the neighborhood). She is a Graduate student at Pitt, and works there too. Is there any websites that I can direct her to for more info?

Hemingway,

FYI from a local newspaper regarding the tax abatement:

[SIZE=5][LEFT]Potential tax savings downtown[/LEFT]
[/SIZE][SIZE=2][LEFT]Amount of tax savings for buyers of condominium units under Pittsburgh’s new
10-year tax abatement program.[/LEFT]
[/SIZE][SIZE=2][LEFT]Assessment City School County Total Total
value (10.8 millage) (13.92 millage) (4.69 millage) (one year) (10 years)[/LEFT]
[/SIZE][SIZE=2][LEFT]$100,000 $1,080 $1,392 n/a* $2,472 $24,720
$175,000 $1,890 $2,436 n/a* $4,326 $43,260
$250,000 $2,700 $3,480 n/a* $6,180 $61,800[/LEFT]
[/SIZE][SIZE=1][LEFT]* ALLEGHENY COUNTY NOT PARTICIPATING (yet)[/LEFT]
SOURCE: TRIBUNE-REVIEW RESEARCH TRIBUNE-REVIEW
[/SIZE]

Downtown condo buyers to get tax break


By Sam Spatter
FOR THE TRIBUNE-REVIEW
Tuesday, October 16, 2007

A tax savings bonanza awaits those who build housing -- or significantly improve residences -- Downtown and in 28 other neighborhoods.
Act 42, a 10-year tax abatement program recently passed by the city and Pittsburgh Board of Public Education to encourage new housing development and substantial rehabilitation of existing houses, offers a tax break up to $6,180 annually -- or $61,800 over the 10 years -- based on current millage rates.
Moderator cut: do not repost copyrighted material


HOPE THIS HELPS.

[pghquest]

- is the assessment based on 100% of the assessed value or on some lesser percentage (as is often the case in other cities)?
Its currently based upon 100% of the assessed value, it used to be 25%, till around 2000 (guessing at year)

- when you buy a house, does that trigger an automatic reassessment?
no, but my opinion states that any appraisal should be turned over to the county to assist in making accurate assessments. Understand though that anyone has a right to ask that your re-assessed.. Frequently, school districts have been asking for properties that have sold higher then assessed values to be reassessed.

Also, it would depend on if your buying a new, vs used home.. New properties have some type of "free" tax periods, I dont know all the details though. (could be outside the city, but inside county, not sure)

- if so, is the new assessment automatically equal to, or very close to, the purchase price?
n/a

[Hemingway]

Thanks KRW, I will pass it along!

Originally Posted by pghquest

- is the assessment based on 100% of the assessed value or on some lesser percentage (as is often the case in other cities)?
Its currently based upon 100% of the assessed value, it used to be 25%, till around 2000 (guessing at year)

- when you buy a house, does that trigger an automatic reassessment?
no, but my opinion states that any appraisal should be turned over to the county to assist in making accurate assessments. Understand though that anyone has a right to ask that your re-assessed.. Frequently, school districts have been asking for properties that have sold higher then assessed values to be reassessed.

Also, it would depend on if your buying a new, vs used home.. New properties have some type of "free" tax periods, I dont know all the details though. (could be outside the city, but inside county, not sure)

- if so, is the new assessment automatically equal to, or very close to, the purchase price?
n/a

I completely forgot that there IS a 2 year tax break for new construction! I should know this, I built in '04! For the life of me, I can't remember details, but it IS on the county website, under 'abatements' I think. Also, they forgive $15,000 in a Homestead rebate,apply once, it is good indefinitely.