3884570701_a11181115e_o Beginning May 1st and through the first business day of August, Chester County Board of Assessment Appeals opens the window once again for the citizens of Chester County, PA to appeal their real estate tax assessments. This is a potential opportunity for people who own homes in Chester County to reduce the annual cost of home ownership through the reduction of their property taxes.

How Taxes are Calculated

Tax assessments in Pennsylvania are calculated as a ratio to fair market value. The ratio is called the Common Level Ratio (CLR) and is determined by the Pennsylvania State Tax Equalization Board. The CLR varies by county and is adjusted and published annually at the end of June. The CLR for Chester County for tax year 2008 is 53.0%. Applying the CLR to the fair market value of real estate results in the Assessed Value.

County, Municipal governments and local School Boards determine taxes by applying millage rates to the assessed values. For example, I live in North Coventry Township. The 2009 millage rates for the County Tax is 3.9650, The Township Tax is 1.6000 and the Owen J. Roberts School Tax is 25.5000. Add this all up and the total millage for my township is 31.0650. Multiply the millage to the assessed value of your and divide by 1000. The result for my home is a total annual property tax of $7147.

Who Will Benefit from a Tax Appeal

Anyone may appeal their property tax appraisal. There is a minimal cost associated with the appeal so you may first want to determine if you will benefit from a tax appeal.

It’s no secret. The housing boom is over. If you purchased a home during the height of the boom, it is pretty likely that the fair market value of your house is less than what it was when you bought it. The question is, when was your last tax assessment? If your home was assessed in the height of the boom, and since assessed value is a function of fair market value, you are probably over assessed. So, here are a few guidelines:

  • If you purchased new construction in the last 10 years and never appealed your tax assessment, you are probably over assessed.
  • If you appealed your tax assessment during the height of the housing boom, the fair market value of your home is probably less than it was when you appealed so you are probably over assessed.
  • If your home was interim assessed during the height of the housing boom due to a home improvement project you may have performed, you could be over assessed.
So, Should YOU Appeal your Taxes?

If you live somewhere other than Chester County, please contact your local county government offices for instructions specific to your county.

You should first determine the fair market value of your home. Many real estate agents will perform a Comparative Market Analysis of your home for free. This will give you an idea of approximate fair market value. The assessed value of your home is easily available through Government public records. Your agent should have access to the public records and should be able find that out as well.  Apply the Common Level Ration for your county to the fair market value of your home. If the result is less than the assessed value, you are over assessed. The percentage difference between your result and the assessed value in public records roughly corresponds to the percentage of savings on your annual tax bill. You can decide at this point if the savings is worth the time, cost, and effort to proceed.

If you live in Chester County and you are unable to find an agent to help you with this, call me at (484) 948-0936 or email jsheehan@chestercountychronicles.com with your address, phone number and a convenient time for me to call and I’ll help you.

How to Appeal Your Taxes

The process of appealing your tax assessment involves the filing of a notice of intention to appeal with a non-refundable filing fee of $25.00. This filing will result in a hearing with the board of tax assessment to show evidence that your assessment should be adjusted. There are two types of assessments but both processes are very similar.

Interim Tax Appeal

An Interim Appeal results from a change in the assessment based on some type of new construction or improvement. The construction could be anything from the addition of a deck to the construction of a new house. An interim assessment notice can be received at anytime in the year and if the homeowner wishes to appeal, he has 40 days from notification of the assessment change notice. After filing the appeal, you will be notified of the hearing date. You should make 3 copies of the HUD-1 Settlement sheet and bring that to the hearing along with pictures of all four sides of the house. The appeal board will review the document, ask any questions they may have (usually none), and thank you for appearing. You’ll hear from them soon after with the new assessment value of your property and your taxes will be adjusted immediately.

Annual Tax Appeal

The Real Estate Professional who helped you with the Comparative Market Analysis may be but probably isn’t a licensed real estate appraiser. The CMA data may be adequate evidence that your home is over assessed but a bona fide real estate appraisal prepared by a licensed real estate appraiser will carry a great deal more weight with the tax appeal board. So, I recommend you engage a licensed real estate appraiser to prepare an official report for the appeal. The cost will probably range from $350 – $500 for an appraisal. The appraiser should be current, I recommend that it be prepared within the past 6 months.

Annual appeals are accepted between the first of May and the first business day of August. YOU MUST FILE YOUR NOTICE OF INTENTION TO APPEAL BETWEEN THESE DATES OR YOU WILL MISS THE OPPORTUNITY UNTIL NEXT YEAR. NO EXCEPTIONS!

Soon after you have filed your intention to appeal, you will receive notice of your hearing. You must appear at your hearing, THEY WILL NOT RESCHEDULE IF YOU MISS YOUR DATE. If you can’t make it, you can authorize in writing for someone to appear in your stead.

Make at least 3 copies of the appraisal, one for each board member. The appraiser should have included photos in his report so won’t need more pictures. At the hearing, the board members will review your evidence, ask any questions (usually none) and thank you for appearing. A few weeks later you will receive notice of the result of your appeal.

Good Luck

The hearings are pretty informal. The appeal board are nice folks. No need to be nervous. You should be in and out in about 10 minutes.

If you have a legitimate reason for the appeal, you should have no problem and the result should be favorable to you.

Because of falling real estate values and the fact that we purchased our home at the peak of the market, I have personally saved thousands of dollars annually in taxes through the appeal process. I have helped friends and neighbors through the process and they have had similar results.

I wish you all the best, feel free to comment or ask questions here on this blog post, or contact me directly if I can be of assistance. For more information, you can also visit the Chester County website.

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