Property Appraisals in Greater-Pittsburgh and possible tax increases (sale, real estate)

[wwalker]

Hey Pittsburgh dwellers. My wife and I are relocating to Pittsburgh for school & work in a couple months and we've heard rumors about property taxes outside Pittsburgh-proper either jumping or merging with Pittsburgh itself.

For example, we're considering a property on the market for $125k. The last appraisal, held in 2002, appraised the house for $39k. In that time it was sold for roughly $125k to the current owners, who have since left and continue to drop their asking price as the days pass...

No one seems to be certain if the appraisal will adjust shortly after our purchase resulting in taxes 3x what they are now (approximately $2700) or if Pittsburgh and Allegheny County will merge, potentially leveling off the taxes. In short, the tax situation could be a deal breaker.

Any thoughts?

[BrianTH]

As I understand it, your assessment won't change automatically. What could happen, however, is an appeal of the 2002 assessment (likely from the relevant school district), which may or may not result in a reassessment. Theoretically, whatever you pay for the house today is not directly relevant, but rather what matters is whether $39K was the right assessment in 2002.

As for a merger, I wouldn't count on that happening any time soon--it will be a long process.

[PeterRabbit]

I agree with BrianTH.

Last year a local judge ruled that using a base year in Allegheny County is unfair because it isn't uniform. In one area of the county property values have declined 15% since 2002 and in another area property values have increased 35%.

The future of the 2002 base year for Allegheny County real estate tax assessment isn't clear. An attorney explains what may come to be here:
Allegheny County Property Tax Assessment Appeals - FLAHERTY FARDO - Allegheny County Property Tax Appeal Lawyers (http://www.wfflaw.com/Default.aspx?CID=16 - broken link)

2008 county tax bills have been issued using the 2002 base year assessment.

[wwalker]

Thanks to you both.

[Windwalker]

Taxes are something of a divine mystery in this city. It's one of the questions I want to ask God: How in the world do Pittsburgh real estate taxes really work?

[nickcio]

Dont be fooled by the base year assessment that is in place. It does not mean that your property assessment will remain the same.

The City of Pittsburg monitors all purchases. If they believe that your house is not assessed high enough, they will file an appeal to the county to have your house reassessed to what you paid for it.

If the house you buy is assessed a lot lower than those in the neighborhood, you can bet this will happen. It will be a red flag to the people in the finance department who monitor this on a daily basis.

It happened to me.

[scrapp]

Originally Posted by nickcio

Dont be fooled by the base year assessment that is in place. It does not mean that your property assessment will remain the same.

The City of Pittsburg monitors all purchases. If they believe that your house is not assessed high enough, they will file an appeal to the county to have your house reassessed to what you paid for it.

If the house you buy is assessed a lot lower than those in the neighborhood, you can bet this will happen. It will be a red flag to the people in the finance department who monitor this on a daily basis.

It happened to me.

Join the club. It happens to a lot of new residents. It is a shame that the first contact many newcomers have with local Pittsburgh government is the government attacking them with a property tax appeal.

[PeterRabbit]

If you're already on the books as a "homesteader" you may not be reassessed as fast as a newcomer. My neighbors sold their house two years ago. It was assessed for $153,000. Sold for $290,000. New neighbor is still assessed at $153,000. They qualify as homesteader.

[BrianTH]

Just to give some practical advice I have gathered for people buying a home for well above its assessed value:

First, try to schedule your closing for after the filing deadline for appeals that year, which will give you a lot more time before this can become an issue.

Second, talk to the sellers and see if they have had to deal with this, and if so get whatever information they have available (such as good comparables--see the next point).

Third, try to arm yourself with good base-year comparables (meaning homes like yours, including location, that sold around 2002 for about your assessed value or less) well in advance of any possible appeal.

As a final note, if you can't find good base-year comparables (e.g., all the homes like yours that sold around 2002 were being sold for considerably more than your assessed value)--well, then the sellers may not have been paying their fair share of taxes, and just didn't get caught. A reasonable goal in such a situation may not be to prevent a successful appeal entirely, but rather just to make sure you are not reassessed higher than you should be.

[Wendelyn Piquette]

You will have to consider a tax adjustment no matter where you buy or when.
Your best bet is to figure out what the adjusted taxes would be and see if it fits your budget. Here's how:

You need to know the millage rates (1 mill = .001) for the county, city, and school district. You multiply this number by the sale price. That is what your taxes MAY adjust to. If they don't you're ahead of the game.
Allegheny County Treasurer (Schools)
Real Estate and Tax Information
(County)
Allegheny County Treasurer (Municipalities)
Let's say you're paying $125,000 for a house in the City of Pittsburgh.
City millage = 10.8
School district = 13.92 *2007 number (08 not available yet)
County = 4.69
Total = 29.41
Move your decimal point 3 places to the left.
Multiply .02941 x $125,000. Your taxes MAY increase to $3676.25 or add $306.35 to your monthly payment.
Please keep in mind this is simply for demonstration purposes. There is no guarantee that you will have an increase, that millage rates will remain the same, or that there may not be other changes that can affect your taxes.

***I would strongly advise: find out if your sellers have received any letters from the school district or elsewhere about a reassessment. I have a friend who encountered this problem and the school district charged her, the new buyer for the adjusted taxes for the previous year. Since it is lienable, the new buyer had to pay. The prior owner left no forwarding address and moved to another state. This was NOT covered under her title insurance and did not turn up in estoppel letters or the title search***