Understanding Property Reassessment
by: Susan Mondik Key, Partner at Peacock Keller
Washington County has recently conducted a reassessment of all of the roughly 120,000 properties in the county. The County last revalued properties in the late 1970's with a base year set at January 1, 1981. This meant that the valuation date of all new construction thereafter, and for the past thirty years, was January 1, 1981. As a result of the reassessment, all properties within the county will now have an assessment based on what their property was worth on July 1, 2015.
The new values will be mailed to property owners March-April 2016. If property owners are not satisfied with the valuation, they can request an informal review with Tyler Technologies. The official change of assessment notice will be sent to all property owners after July 1, 2016. If a property owner is still not satisfied with their valuation, a formal appeal may be filed with the County Tax Revenue Department and hearings will be held before the County Board of Assessment Appeals until October 31, 2016.
In November, those new assessment values will be certified by the County to the taxing bodies which will utilize those values to calculate new tax bills starting with the 2017 tax year. (Beginning on January 1, 2017 for the county and local real estate taxes, and July 1, 2017 for school taxes.) Until those tax bills are calculated, property owners will not know whether their real estate taxes will increase or decrease as a result of the new assessment.
Pennsylvania has enacted statutory limits to which a municipal subdivision can raise its taxes at the completion of a countywide reassessment. In the first year that any county implements a countywide revision of assessment by revaluing the properties, a taxing district levying its real estate taxes on the revised assessment roll for the first time shall reduce its tax rate, if necessary, so that the total amount of taxes levied for that year are not more than 10% greater than the total amount it levied on the properties the preceding year, notwithstanding the increased valuations of the properties under the revised assessment.
The 10% cap on tax revenue does not apply to school districts which are further restricted in their ability to raise taxes. Under Act 1 of 2006 known as the Taxpayer Relief Act, school districts cannot increase their taxes beyond an inflationary index unless they gain voter approval through a referendum. The index for most school districts is approximately 3% this year.
Therefore, a school district must decrease its millage following a countywide reassessment so that the total amount of taxes levied are no more than 3% greater than the total amount the district levied on those properties in the proceeding fiscal year.
Undoubtedly, all assessments in Washington County will increase as a result of the reassessment because of the switch from assessing property at 25% of the 1981 market value to 100% of the 2015 market value. However, Washington County residents must wait another year to see the impact of the reassessment on the amount of taxes they will pay. But, we are all guaranteed by state law that the overall tax increases will be minimal due to this anti-windfall legislation.