Take Advantage of This Time-Sensitive Opportunity to Save on Your Pennsylvania Property Taxes

If you own or lease a significant amount of real estate in Pennsylvania and operate in a sector hit hard by COVID-19, now is the time to act on filing a property tax assessment appeal. An appeal shifts the market valuation date to the filing date rather than the pre-pandemic value. If the assessment is reduced, the revised assessment will generally stay in place until the next county-wide reassessment.

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

Properties That May Qualify

  • Properties subject to value decline because of market change (COVID-19 impact) Typical 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
  • County reassessments: Specific property (e.g., building addition) or county-wide (infrequent, varies widely) “Reverse” appeals by school districts or municipalities

Typical Reasons for Over-assessments

  • Improper inclusion of personal property in real estate assessment Property value decline, including rising market capitalization rates
  • County Common Level Ratio, effective July 1 and based on 2020 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

  • Stale assessments
  • Recent sale prices of commercial/industrial properties exceeding Assessment’s Indicated Market Value
  • School Districts — the largest share of property taxes — pension under-funding and COVID-19 fiscal pressures
  • Permitted except for targeting by property type under a 2017 Pennsylvania Supreme Court ruling

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

A 4-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 Should I Start?

  • For 2021 appeals, effective 2022 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.

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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