THATíS NOT FAIR!
hope that you are as excited as I am. I donít believe I have
ever been happier. In just a few days, some total stranger is
going to place a piece of paper in my mailbox that declares that
my house is worth twice as much as it used to be worth. This is
called reassessment, and is it ever a great time to be a
property owner in Allegheny County.
But not everyone is going to be as happy as I am. Many people in
the city and the suburbs are going to be really upset that their
homes are now valued at much higher values than before, even
though that value might still be below their purchase price. In
fact, the first time I handled a property assessment appeal in
Allegheny County, the judge asked my client the magic question:
ďWould you sell your house for that new assessment figure?Ē Of
course my client, being under oath and all, said, ďAbsolutely
not! It is worth much more than that.Ē And with that simple
ask-and-answer, the case was closed and I had learned another
valuable lesson: whenever possible, never let a client speak.
But I digress. Years ago when the judge ordered all of the
properties in our county to be reassessed, he ignited a
political firestorm that continues to blaze out of control
today. Politicians seem to believe that the value of the
property actually means something when it comes to setting real
estate taxes. And they also believe that we voters believe they
are concerned for us. But are they?
Letís examine the facts. If the total of the real estate taxes
on my home is $3,000 per year, and if my home is assessed at
$100,000, I am being taxed at 3 percent. If there are 1,000
homes in my county, township and school district, and if we are
all taxed the same, then our total real estate tax revenue adds
up to $3 million. From this total revenue, my county, my
township and my school district take out what they need in order
to run their operations.
Then along comes a reassessment. The assessor revalues all 1,000
of our homes at $150,000. The budget for running the county,
township and school district is still $3 million, so they have
to lower the tax rate (called millage) to avoid receiving a
windfall. Now for the tax on my home to stay at $3,000 per year,
they will have to lower my tax rate to 2 percent.
Therefore, because I am going to pay the same amount of taxes
every year, the value of my home does not really matter, as long
as two things happen: one, the homes are all valued the same and
two, the taxing bodies stay within budget so they donít have to
raise the tax rate. But you are a smart cookie and you know that
neither of those two things is correct. Your neighborís house is
assessed lower than yours, even though he has a finished
basement and a deck and you donít. That is not fair! And the
school board caved in to the unions last year, resulting in a $1
per hour raise, so they had to raise the school taxes this year.
That is not fair, either!
When you get your assessment, look at it carefully and ask
yourself several questions. First and foremost, is the value of
your house near the assessed value? If it is, then you might
have difficulty proving that you are being treated unfairly.
Second, how does your homeís assessed value compare to other
homes in your neighborhood? If it is really high for no valid
reason, that might give you a good reason to consider filing an
appeal. Of course, if yours is really low, your conscience
should guide you as to whether you want your assessment brought
up to the level of others in your neighborhood so that you can
pay your fair share of the tax load. Right?
Third, and perhaps most important, is how much of a reduction
you can reasonably expect to achieve through an appeal. Letís go
back to the $150,000 house that I used as an example. If you get
that reduced to $140,000, and if the tax rate is still 2
percent, you will achieve a savings of $200 per year. Now,
consider how much your appeal will cost you. If you do it
yourself, your half day in Pittsburgh where they conduct the
hearing will be well worth your time.
But if you hire an appraiser to back you up, for $350 to $500,
and if you hire an attorney to represent you for another $500 to
$750, your reduction of $200 per year will result in a loss. So
keep your eye on the prize and understand that in order to make
your appeal worthwhile, you have to achieve a result that more
than pays for the cost and expense of pursuing it.
Christopher M. Abernethy has been practicing law in Hampton
Township since 1976. He focuses on elder law, which includes
wills, trusts, powers of attorney, living wills and probate
matters. He also is proficient in all aspects of real estate law
and business law. He is a member of the National Association of
Elder Law Attorneys and the AARP Legal Services Network. He can
be reached at 412-486-6624 or by email at firstname.lastname@example.org.