Everyone wants property tax help to lower their property taxes, but where do you begin? In this post I'm going to show you how to reduce your property taxes by appealing your assessment.
Most people believe that appealing their property assessment in order to lower their taxes is tantamount to going before a judge in a court of law and requires attorneys and out of pocket expenses. I’m going to tell you how simple and inexpensive the process is and even better, no lawyers needed.
Doug and I appealed our assessment in 2009 and saved $1,200 a year on our property taxes.
Property taxes, which include county, township and school district taxes, are based upon a home’s fair market-value. We all know how drastically the real estate market has swung over the last 15 years. Your home may very well be over assessed.
When looking at your tax bills, you will notice that there is NO indication of “fair market value,” but your home is given a “taxable assessment.” This assessment is just a percentage of your home’s fair market value. In Chester County, if you have not appealed your taxes since 1998 when the last countywide assessment was performed, this number has not changed. The assessed value times the tax millage rate equals your tax bill.
Technically, you will be appealing to have your assessment lowered and this in turn will lower your property taxes.
First, you need to determine the current fair market value of your property to see if you have a shot at lowering this assessment. You have 3 options to come up with this market value:
1 – hire a licensed PA appraiser to complete a certified appraisal
2 – submit documentation of recent sales of similar properties nearby
3 – submit your settlement sheet if the home was recently purchased.
All documents must be within 12 months of your actual appeal hearing. One exception, if you bought a short sale or foreclosure, you will be required to submit an appraisal that is less than 6 months old. Please note that the Board of Assessment Appeals recommends that you submit a certified appraisal report at your hearing. Depending upon the age and size of your home, an appraisal can cost $500 or more. If you prefer to save the money, and present market comparables instead, give Doug and me a call at 610-255-7222 and we can help you with this.
Once you have an estimated market value you need to convert this market value to an assessed value for your property in order to determine if it is higher or lower than your current assessment. Simply multiply this number by the current Chester County Common Level Ratio factor. This Common Level Ratio changes yearly and is set by the State of Pennsylvania for each individual county. While it seems like another mystery number that the government comes up with, it is simply the average of all assessments to sales prices over the last 12 months in each county. At the time of this writing, the estimated Common Level Ratio Factor in Chester County for July 1, 2016 – June 30, 2017 is 53.8%.
For example, if your market value is $300,000, multiply by .538 and your assessed value is $161,400. Now you need to compare this new assessed value to your current assessed value to see if it is lower of higher, and assess the impact it will have on your taxes.
Keep in mind that your taxes may be raised, lowered or remain the same based upon this new assessment.
Appeals can only be filed May 1 – August 1 in Chester County. Tax changes are not retroactive and will take effect when next year’s tax bills are issued. The Notice of Intention of Appeal form can be obtained online at Chesco.org or at the Chester County Assessment office 313 W. Market St., Suite 4202, West Chester, PA. 19382.
There is a $25 fee per residential property which is due when filing. Check and money orders only. You will be notified at least 3 weeks before your actual scheduled hearing date. If you know of any upcoming times that you won’t be available to attend a hearing, be sure to include these dates on your initial application.
The hearing itself is quick and painless. You literally walk into a room with 1 or 2 of the 3 County Board of Assessments members sitting at a table. You hand them your home market value information and tell them about any other information you feel may impact the value of your property. For example, maybe a commercial building is being built across the street from your house and you believe it will lower your home’s value.
As I mentioned earlier, Doug and I went through this same appeal process and reduced our taxes by $1,200. That’s an ongoing annual savings too!
You may have received letters from attorneys offering to represent you in your appeal and only charge you a percentage of your tax savings—usually 50% of your first year tax savings. Our actual hearing took less than 5 minutes and we kept the $600 that would have gone to the lawyers.
Still a little unsure? If you’d like Doug and me to walk you through this, simply give us a call at 610-255-7222 and we’d be happy to help you out and answer any questions you may have.