Should you appeal your Allegheny County 2012 assessment?

Given all of the recent activity and confusion surrounding Allegheny County’s 2012 property reassessment, many property owners are left wondering, “Should I appeal my 2012 assessment?”  While every situation is different, there are some common factors to consider.

The overall increase in assessments for properties in the City of Pittsburgh and Mount Oliver is about 58%.  That doesn’t mean that the taxing bodies will be taking in 58% more revenue based on the new numbers.  The taxing bodies are bound by statute to adjust their millage rates to prevent a windfall in tax revenues because of the reassessment.  Assuming millage rates are adjusted down so that there is no windfall to the taxing bodies, anyone with an assessment that increased less than 58% should, in theory, be receiving a tax decrease as a result of the reassessment.

However, the above calculation is not perfect, as it is based on overall numbers.  The actual numbers will vary from property to property.  Also, if an extremely large number of people successfully appeal their assessments, it could result in the overall increase in assessed values decreasing from the current 58%.  If that occurs, more and more property owners will end up with a property tax increase.  However, it might be too late by the time the dust settles on those initial appeals for those who sat on the sideline to appeal for 2012.

As for your individual assessment, the first thing to do is review the information that the county currently has listed for your property.  Look for obvious discrepancies such as county records saying you have 4 bedrooms when you really have 3, or the county listing your square footage as much larger than it actually is.  These are usually good points of argument for an appeal.

You will also want to perform a rough calculation of what your property tax savings might be from a successful appeal.  For ease of calculation using current millage rates, assume that you will be paying 3% of your property’s assessed value every year in property tax between county, local, and school district millage rates.  That means a reduction of $20,000 in your assessment could result in approximately $600 in property tax savings.  Those savings will likely continue from year-to-year until your property value is reset because of a later reassessment.  *Note that this is a rough calculation and may change once millage rates are adjusted.

Finally, you are going to need to consider what it is going to take to get through the appeals process and how much time, energy and expense you are willing to invest.  If you handle your own appeal, you will need to find (and likely pay for) a comparison of comparable properties to use at your appeal.  You will also need to review the formal appeals hearing rules and take the time to attend your scheduled hearing.  Obviously, if you hire an attorney to represent you at your appeals hearings, you will save yourself some headaches.  Most attorneys are willing to handle assessment appeals for either a percentage of the tax savings generated, or a flat fee.

Whatever you decide, you can’t afford to just sit back and wait.  Property owners in the City of Pittsburgh and Mount Oliver have until February 24, 2012 to make formal appeals of their assessments with hearings beginning by February 1, 2012.  Suburban reassessment numbers are expected to be released in March.

Further updates will be provided as developments continue.

Author: Steve Photopoulos can be reached at steve@sphotolaw.com or (412) 414-9889.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.