Attorney Fardo to Speak at Seminar on Tax Exemption
An outline of Atty. Noah Fardo’s lecture on Tax Exemptions and Abatements in Allegheny County
Attorney Noah Paul Fardo will be a guest lecturer on Tuesday, March 6, 2012, at a Continuing Legal Education (CLE) seminar focusing on the tax assessments in Allegheny County, Pennsylvania. The event will be presented to lawyers and real estate professionals from noon to 2:00pm in the Gold Room on the 9th floor of the Allegheny County City-County Building.
Attorney Fardo will be addressing Tax Exemptions and Abatements in Allegheny County.
Below is the outline and notes from his presentation that should help readers understand some of the basic questions and answers concerning exemptions and abatements for 2012 in Allegheny County.
Pittsburgh Homestead Tax Exemptions and Where they Apply
Allegheny County currently offers Pittsburgh Homestead tax exemptions for non-profit organizations and governmental agencies.
Exemptions are authorized by state law (Article VIII, section2(a) of the Pennsylvania Constitution of 1968 and include the following properties:
- Churches or actual places of regularly stated religious worship
- Burial grounds (not held for profit)
- Institutions of charity (all revenue must be applied to the support of the institution)
- Educational institutions
- Fire and Rescue stations (along with their social halls)
- Some Disabled Veterans, (In Allegheny County, honorably discharged war-time veterans having a 100% service-connected disability can be exempt from real property taxes on their primary residence -- must also demonstrate need)
- Public parks for public use, and other public property used for public purpose
- Real estate owned by institutions of purely public charity and actually and regularly used for the purpose of the institution. (Must also be founded by charity and must not go beyond self-support.)
Broadening Pittsburgh Homestead Tax Exemptions
The Pennsylvania Supreme Court set forth the test for purely public charity in Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985). The HUP test was:
- Advances a charitable purpose;
- Donates or renders gratuitously a substantial portion of its services;
- Benefits a substantial and indefinite class of persons who are legitimate subjects of charity;
- Relieves the government of some its burden;
- Operates entirely free from private profit motive.
However, more recent PA Supreme Court decisions have left the option open to future courts to allow a broader, more expansive definition of purely public charity. (See City of Washington v. Washington County Board of Assessment Appeals, 550 Pa. 175, 704 A.2d 120 (1997) and Unionville-Chadds Ford School District v. Chester County Board of Assessment Appeals, 552 Pa. 212, 714 A.2d 397 (1998).)
Let’s take a look at the qualifications for abatements in Allegheny County. Allegheny County Pittsburgh Homestead Tax Exemptions and Abatement Programs include:
1. ACT 50 – (Homestead/Farmstead Exclusion):
Deadline to file: March 1, 2012
Pittsburgh Homestead Tax Exemption:
- For county tax purposes only
- Reduces total (land and building) assessment $15,000 (saves $85.35)
- Only have to file once, and do not have to refile each year, unless there is a deed transfer
- Automatically qualify for Act 1 reduction
- May qualify, even if also used for business, as long as property consists of primary dwelling. This includes potential of properties with commercial designation
- Homes in “trusts” qualify
Farmstead Tax Exemption:
- 10 acres of contiguous land
- Produce or store farm product for purposes of commercial agricultural production
- House raised animals or maintained on the farm for purposes of commercial agricultural production
- Store equipment or machinery used on the farm for purposes of commercial agricultural production
2. ACT 1 – Property Tax Relief:
Deadline to file: March 1, 2012
- The Taxpayer Relief Act, Act 1 of Special Session 1 of 2006. (Signed By Gov. Rendell on 6/27/06);
- This program is for school tax purposes only
- Automatically enrolled if application for Act 50 is filed.
3. City Act 42 – (New Construction Or Home Improvements):
- Must apply within 180 days of issuance of the permit
- Must attach copy of building permit
- If you purchase or build a NEW home in the City of Pittsburgh
- Can abate up to the maximum amount of $86,750 assessed dollars off the building assessment
- Improvements can be abated up to maximum amount of $36,009 assessed dollars from the increase
- In effect for 3 years
- Expires: 12/31/13.
4. Senior Citizen Property Tax Relief Program:
Deadline to file: July 31, 2012
- Primary residence for 10 years (can combine years with new residence in Allegheny County)
- At least one spouse must be 60 or older
- Widow or widower age 50 to 60
- Permanently disabled and age 18-60
- Gross household income must be $30,000 or less (for calculating use only 50% of SS, SSI, and Railroad retirement Tier 1 benefits (except Medicare benefits)
- 30% discount on the real estate tax on their primary residence
5. ACT 202 – New Construction County Wide:
- Abatement for the improved value of the home
- Valid for 2 years and expires 12/31/13 (whichever occurs sooner)
- Applies to new construction after 1/1/96
- Applies to the building only (still taxed on the land)
- Completed ACT 202 application should be submitted at the time the building permit is issued
- Must attach copy of building permit
- Application must be filed and dated prior to the occupancy permit date
6. Catastrophic Loss Form:
- 50% or more diminished property value
- May qualify for reduction of property assessment
- Must file within 6 months or within remainder of calendar year (whichever is longer)
- May also proceed through the appeals process
7. ACT 76 – LERTA – Local Economic Revitalization Tax Assistance Act
- Purpose is to encourage commercial and industrial business in municipalities throughout Allegheny County
- Ordinance varies depending upon municipality
- County and School do not automatically apply for municipalities in the program
- Municipalities include
- City of Pittsburgh (File at City Treasurer’s Office)
- City of McKeesport
- Carnegie Borough
- Collier Township
- Forward Township
- Harrison Township
- Jefferson Borough
- Leetsdale Borough
- McKees Rocks Borough
- Moon Township (Moon Transportation Authority)
- Mount Lebanon Township
- Munhall Borough
- Swissvale Borough
- Wilkinsburg Borough.
8. ACT 156PA (Clean & Green Program):
Deadline to appeal: June 1 (for following calendar tax year).
- The Clean & Green Act is found under a Pennsylvania Statute 72 P. S. § 5490.1, Chapter 137b
- The property tax advantage applies for land devoted to:
- Agricultural Use
- Agriculture Reserve
- Forest Reserve
- The advantage is the LAND is eligible to be assessed at the value it has for that use instead of at fair market value
- The disadvantage is that a roll-back tax must be paid for a period of 7 years, plus interest
- Must be 10 continuous acres
- Exception: Less than 10 acres can qualify if used for agricultural use AND if land is used to generate $2,000 annual gross revenue
- Agricultural Use is defined as “Land which is used for the purpose of producing an agricultural commodity: such as:
- Dairy products.
- Livestock and the products thereof
- Ranch-raised fur bearing animals and the products thereof
- Poultry and the products of poultry
- Products commonly raised or produced on farms which are intended for human consumption or are transported or intended to be transported in commerce
- Processed or manufactured products commonly raised or produced on farms which are intended for human consumption or are transported or intended to be transported in commerce
- Agricultural Use also includes any land under a residence and/or woodlot.
- Any application allows an assessor to visit and inspect the subject property.
- Taxing jurisdictions may challenge exemption status of any property in Allegheny County by filing a Taxing Jurisdiction Exemption Challenge by March 31st of the applicable tax year, or the first following business day if the 31st is a holiday or weekend.
If you have any questions about Allegheny County property assessments or real estate in Pennsylvania, please feel free to contact us at Flaherty and Fardo for a free consultation.