Recently released Common Level Ratios effective for PA tax assessment appeals filed now through next June show significant increases in the implied market values for assessed values in several Counties. Where this is skewed by a relatively higher rise in residential property values, now is a prime time to consider an assessment appeal for non-residential commercial and industrial properties, especially in sectors that have yet to reach their pre-COVID demand and those suffering from high vacancy rates, fallout of rapid inflation, recession birth pangs or other market conditions.
Among Counties having an increase in implied market value from a year ago of 15%+ (25%+ shown bolded) with an assessment filing deadline of:
- August 1 are Delaware (37%), Erie (15%), Lancaster (15%), Luzerne (18%), Monroe (26%), Northampton (15%) and York (15%);
- August 15 is Berks (16%);
- September 1 are Carbon (24%), Perry (17%), Pike (23%), Schuylkill (22%) and Wayne (26%); and
- March 31 is Allegheny (28%).
See the complete list here.
Our team consists of highly experienced tax, real estate and litigation professionals with significant Pennsylvania property tax assessment expertise. We make the process seamless, and our attorneys can handle all aspects of a property tax assessment appeal – including any subsequent appeal litigation. Also, in many cases, we can offer our services on a contingency fee basis.
Here’s what you need to know:
Goal
- Minimize tax assessments of commercial, industrial and other high-value real estate in Pennsylvania
Who/Areas Affected
- Typically over-assessed properties:
- Manufacturing plants, functional or economic obsolete buildings
- Commercial properties with high vacancies and/or tenants in bankruptcy
- Unique/complex buildings
- Areas that have become increasingly depressed
- Property value decline because of market change (i.e. lingering COVID-19 impact)
- County reassessments: Specific property (e.g., building addition) or county-wide (infrequent, varies widely)
- Defend against “reverse” appeals by school districts or municipalities
Typical Reasons for Over-Assessments
- Improper inclusion of personal property or business value in real estate assessment
- Property value decline, including rising market capitalization rates
- County Common Level Ratio, effective July 1 and based on 2021 sales, exceeding market value on date of appeal. To learn the market value implied by the assessment, the assessment must be divided by the applicable County Common Level Ratio. For example, for a County with a pre-determined ratio of 100%, if the tax bill shows an assessment of $1,000,000 and the applicable County Common Level Ratio is 50%, the property is being taxed on an implied market value of $2,000,000 ($1m/.50).
Typical Reasons for “Reverse” Appeals by School Districts and Municipalities
- Recent sale prices of commercial/industrial properties exceeding assessment’s implied market value
- Improper consideration of business valuation as an aspect of real property valuation
- School Districts — the largest share of property taxes — pension cost and inflationary fiscal pressures
- Targeting income producing commercial properties while ignoring residential (i.e., voter-owned) properties
Client’s Value Proposition
- Assessment change starts tax year after year appeal filed (current tax year if reassessed)
- Revision typically stays in place until next county-wide reassessment
- Out-of-pocket cost primarily the appraisal and (if required) appraiser’s testimony
Stevens & Lee Capabilites
- Experienced property tax attorneys, including property tax litigators and real estate attorneys
- Seamless: Handle all aspects — from opportunity identification, appeal before assessment board and, if necessary, subsequent appeal litigation (non-attorneys barred from representing taxpayers at all appeal levels)
- Legal Professional Standards: Ethical and confidentiality standards apply
- Alternative Fees: Percentage of future tax savings or fixed fee may be available
A Four-Stage Process
- Identify possible over-assessed and/or exempt properties; review and analyze “reverse” appeal filing Develop strategy, craft legal arguments and gather evidence
- Timely file with County Assessment Appeals Board (on or before August 2 for most boards or September 1 for certain other boards except Allegheny March 31, Berks August 16, and Philadelphia October 1)
- Timely file appeal (if necessary) with County Court of Common Pleas; settlement discussions and trial (if necessary)
When
- For 2022 appeals, effective 2023 tax year — begin process now
- Reassessments — 40 days to appeal
To learn more, please contact the Stevens & Lee attorney with whom you regularly work, or any of the attorneys and professionals listed below.
David J Shipley
Richard M. Botwright
Anthony R. Thompson
James F. Kratz
Thomas A. Bowen
Mark D. Bradshaw
Kay Lynne Dimmick
Michael A. Gruin
Ambrose W. Heinz
Tamara Fox Rose
Deborah A. Sottosanti
Donald E. Wieand
This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.
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