If you are considering selling your Allegheny County real estate, it is important that you understand what the tax code requires. This includes the Common Level Ratio (CLR), Act50, Assessment freeze, and deadlines for tax appeals. Knowing these details will help you avoid paying more than you have to.
Common Level Ratio
The common level ratio is a measure of a property’s value in relation to its assessed value. A property that is assessed at $100,000 has a common level ratio of about 81.1%, while a property that is assessed at $109,000 has a common level ratio of about 10.4%.
Tax appeal deadlines
In the state of Pennsylvania, there are several deadlines for filing real estate tax appeals. First, a property owner must file an appeal by March 31. This deadline will be extended in some cases, as property owners may want to resubmit their sales data to the STEB. Second, there are two levels of appeals. The first level appeal is conducted by the Allegheny County Board of Property Assessment and Review.
Homestead/Farmstead (Act50) determinations
Homestead/Farmstead (Act50), or “homestead exemption,” determinations are made on real estate for tax purposes. Homestead/Farmstead exemptions apply to residential properties that are owner-occupied and certain farmstead properties. These exemptions are subject to penalties and interest if the property is not used as a primary residence. In some cases, residents can request a hearing if they have concerns.
Assessment freeze
After the state Supreme Court ruled the Base Year method of property assessment unconstitutional, Allegheny County will have to come up with a new assessment plan. That means that property owners who had already been assessed will see their taxes go up 20 percent. The new plan will also require a two percent across-the-board assessment increase.
Property tax increases
Property owners in Allegheny County pay property taxes that are based on the assessed value of the property. These assessments are based on the county’s assessment of property values in 2012. Property owners can appeal these assessments before the Allegheny County Board of Property Assessment Appeals and Review.
Reassessment
Allegheny County property owners have a golden opportunity to reduce their real estate tax assessments in 2023. As the largest operating expense for income-producing properties, real estate taxes can be a significant burden. But a change in the Common Level Ratio in Allegheny County will allow property owners to reduce their property taxes. Peter Schnore, a Shareholder at Babst Calland, explains how this adjustment will affect property values and the steps property owners should take to reduce their property taxes.
Base-year system
Historically, the base-year system for real estate assessments in Allegheny County has been the subject of much controversy. Allegheny County formerly did not use the base-year method of assessing property. Instead, it purported to assess each property at its actual value for the current taxable year. Further, the county did not do annual countywide reassessments. As a result, the assessed value of a property in the prior year was used in determining its value in the current year. Moreover, the county reassessed whole areas occasionally, including portions of a school district.
