Taxing bodies continue appeals win streak

Taxing bodies continue appeals win streak

In 2018 the Allegheny County Board of Assessment Appeals and Review considered more than 6,600 property value appeals.  These appeals were filed by owners and taxing bodies on residential and commercial parcels constituting $2.402 billion in assessed value. The net change in value between owners seeking to reduce their property value and taxing bodies seeking to raise property values was an increase of $77.7 million to $2.479 billion.

It is a familiar story in Allegheny County: with assessed values based on a 2012 base year, taxing bodies will seek out recent sales where the purchase price exceeds the assessed value by some dollar amount or percentage and file an appeal.  This practice unfortunately singles out recent buyers since properties might have risen in value as much as the one they just bought but properties that don’t sell are not subjected to a taxing body appeal.

Appeals brought by owners resulted in a decrease in assessed value of $239 million.  But this was outstripped by a $316 million increase in value on parcels where the appeal was filed by a taxing body, which, in the majority of cases, was a school district.  That’s not surprising given the fact that school taxes represent the bulk of the total property tax bill and school districts have a much greater incentive to appeal values.  The county and the respective municipality also net more taxes on successful upward appeals.

There were eight appeals brought by school districts that resulted in a change from pre- to post-appeal value of $2 million or more.  An appeal on an office building in downtown Pittsburgh resulted in an increase of $11 million from $60 million to $71 million.  If that value stays in place (it is being appealed in the Court of Common Pleas) that would result in an additional $296,000 in property taxes for the three taxing bodies.  It would also stand as the largest increase in terms of value to result from a taxing body appeal in the last three years.

More frequent reassessments would probably never eliminate appeals of property values altogether but might curtail a bit of the activity.  As in previous sessions of the General Assembly, there is a yet to be introduced proposal to ban appeals based solely on the incidence of a sale and would instead require a change to the nature of the property to be appealed.