Tax Assessment (Pittsburgh, Penn: sales, real estate, assessor)

[newtrain]

We are zeroing in on a few houses in Pittsburgh but I am still very confused about how house assessment for taxes is done in Allegheny County. I have heard conflicting reports - can anyone shed some light on this or point me to some information on the web?

Thanks!

[Hopes]

I guarantee you that your assessment price will most likely be very close to your purchase price. I know this because I have a friend who bought a house in Squirrel Hill for an outragous amount of money. She had no idea that the previous owner had purchased it for a half a million less only two years prior. She was moving here from an area where real estate prices were high and it seemed like a fair price to her at 900k. Her taxes shot up overnight. Even though she tried to appeal it, she was unsuccessful becasue the very fact she purchased the property for 900k proved it was worth 900k. The ONLY way she could have fought it is if she had filed a lawsuit against the inspector and proven that he had missed structural problems with the house in his report; however, she couldn't go that route because there were no structural problems with the house. Fortunately, many houses in her area are starting to become worth similar value to her house so she won't experience a loss at resale.

[Mr. Mon]

Originally Posted by Hopes

I guarantee you that your assessment price will most likely be very close to your purchase price. I know this because I have a friend who bought a house in Squirrel Hill for an outragous amount of money. She had no idea that the previous owner had purchased it for a half a million less only two years prior. She was moving here from an area where real estate prices were high and it seemed like a fair price to her at 900k. Her taxes shot up overnight. Even though she tried to appeal it, she was unsuccessful becasue the very fact she purchased the property for 900k proved it was worth 900k. The ONLY way she could have fought it is if she had filed a lawsuit against the inspector and proven that he had missed structural problems with the house in his report; however, she couldn't go that route because there were no structural problems with the house. Fortunately, many houses in her area are starting to become worth similar value to her house so she won't experience a loss at resale.

No offense, but your friend didn't do her homework if she assumed that 900k was a good price for a "house" in Squirrel Hill. That price will nearly get you a mansion. Plus, if you can afford to pay that kind of money for a house then I imagine that the ability to pay your taxes would likely be one of your least concerns.

Also it's likely that she bought her house right before the last county-wide rreassessment. The assessed values used for taxes do not change whenever a property is bought and sold.

[Hopes]

Originally Posted by Mr. Mon

No offense, but your friend didn't do her homework if she assumed that 900k was a good price for a "house" in Squirrel Hill.

I admitted that in my post. She came from another country. She thought it was a good price for a home based on her means and property values where she lived. She wanted to be in Squirrel Hill and it was the only house she liked.

Originally Posted by Mr. Mon

That price will nearly get you a mansion.

It is a mansion by the standards of older mansions within the city limits.

Originally Posted by Mr. Mon

Plus, if you can afford to pay that kind of money for a house then I imagine that the ability to pay your taxes would likely be one of your least concerns.

Her ability to pay her taxes doesn't eliminate her desire to not pay higher taxes than she anticipated paying.

Originally Posted by Mr. Mon

Also it's likely that she bought her house right before the last county-wide rreassessment.

That's absolutely true.

Originally Posted by Mr. Mon

The assessed values used for taxes do not change whenever a property is bought and sold.

You're right, her circumstance was special. A person's property tax won't normally change immediately after someone purchases a house. Thanks for correcting me on that point. But I guarantee that it will change next time the property is reassessed. People should be aware of that if they plan to live in the house long term.

[likepgh]

Originally Posted by Hopes

A person's property tax won't normally change immediately after someone purchases a house. Thanks for correcting me on that point. But I guarantee that it will change next time the property is reassessed. People should be aware of that if they plan to live in the house long term.

Well, it won't happen immediately after, but it may well happen before the next reassessment. A few years ago we bought a house in Squirrel Hill for a good bit more than the assessed value (no, we did not pay anywhere near 900K). The next year the city of Pittsburgh appealed and asked that our assessment be raised to the sales price since that determined "market value." The country assessment board accepted the appeal. So, yes, the assessment does not automatically rise when you buy the house, but it could rise before the next reassessment if the municipality or school district appeals. The base-year concept would have thrown this out the window (presumably) as the sale price in 2007 would not say much about the market value in 2002. However, now that the base-year has been struck down and if the higher courts uphold the ordered reassessment, I assume we will go back to a "market value" system and then these sort of appeals will return. In short, if you are buying a house in Allegheny County, it would be wise to calculate whether you can afford the property tax assuming the assessed value is your sales price and not whatever is listed on the country site. So Hopes' advice is pretty sound; it's just that the "long term" may be shorter than one thinks.

(I should say that while the base-year benefits me personally, it strikes me as pretty absurd public policy.)

[MixedFeelings]

Ilikepbh: Could you elaborate more about how and when the base year has been struck down? I have been taking the Allegheny tax assessor web site to heart when it says (as of today):

"Base Year Methodology:
Under Pennsylvania state law the last county-wide reassessment is the base year. In October 2005, Chief Executive Dan Onorato and County Council passed legislation implementing a base year system. Allegheny County’s last county-wide reassessment was 2002. All values represent the estimated base year market value of the property as of January 1, 2002, unless otherwise updated due to permits, appeals, corrections, flood loss or catastrophic loss. Base year methodology allows similar homes to have similar assessments until the next county-wide reassessment."

Is this what has been struck down? Can you tell me where to find more updated information about this, as well as the new ordered reassessment you mention? This is all news to me and I have been asking realtors, residents, and doing web searches for a while trying to see if there is any change from the status quo.

We just bought in Sq Hill, and our sellers bought in 2005, got reassessed, lost their appeal, but then this decision was reversed by the base year system that was adopted in late 2005 (the home value was then rolled back to its 2002 value and has remained as such).



Thanks!

[MixedFeelings]

No wonder I hadn't heard - I'm still in CA and don't move until next week.

This article gives a decent overview of the bizarre state of affairs:


http://www.pittsburghlive.com/x/pitt.../s_511304.html

The good news is that this ruling pulls the entire state into this fray - and will likely be litigated for several years. Also, there is the apparently conflicting 2006 state law that requires school districts and municipalities to adjust their tax rates after a reassessment, so they bring in the same amount of money after a reassessment as before is maybe good - will probably add another year to the court appeals, at least. . .

In my talking to many folks who live in an around Sq. Hill: most are still paying 2002 values on their homes (though don't pull permits for major additions or buy a house for a large amount over the previous sale price).

[Hopes]

Thanks for hopping in and offering additional insight, MixedFeelings.

Clearly, nobody is safe from having their newly purchased property reassessed!

Buyers should plan to pay taxes based on the purchase price of the home.

If they don't get reassessed, they'll be under budget.

If they get reassessed, they'll be financially prepared.

[likepgh]

Sorry. Looking back at my post, I realize I should have linked to one of the articles last week about the judge's decision. Yes, it's a big mess and will probably take years to sort out.

I also realize that I didn't tell the rest of the story. This year, the county filed an appeal on our behalf and on behalf of the thousands(?) of others who had bought since 2002 and seen their assessments raised--to return the assessment to the 2002 value. The appeal was accepted and last week--a day or two after the court decision incidentally--we got a refund check from the county for overpayment of our taxes. (We have not gotten a refund check from the city and school district yet. Draw your own conclusions.)

Anyway, Mixed Feelings, I hope you enjoy Squirrel Hill. Despite the property tax craziness, we are very happy with the quality of life here and still consider Pittsburgh a bargain. We've had a wonderful time here. Welcome to the neighborhood.

[Hopes]

I just want to clarify that I meant my last post to be directed to likepgh. I mistyped the wrong username. My brain must be turning to mush!

I'm glad to hear the assessments have been returned to the 2002 value. That means that my girlfriend's taxes were lowered. I'm sure she'll be getting a very nice check from the county very soon.

Does this mean they can no longer appeal assessements when property is purchased at a higher price? I hope so. It's time they settled on one way to assess taxes and stick with it.