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April 12, 2022

3 Reasons Allegheny County Needs a Reassessment Now

Allegheny County, Pennsylvania property assessments are outdated, potentially discriminate against minorities and/or lower income neighborhoods, and violate Pennsylvania law. These are among the top three reasons why Allegheny County needs a county-wide reassessment.

Allegheny County has not had a reassessment since 2012. Of the 580,000+ properties in the county, more than 75,000 property owners have been appealed by the taxing entities helping to set up one of the highest and most unfair taxation systems in the entire country. Few people realize it, but Allegheny County, Pennsylvania property taxes are among the highest in the nation. A $500,000.00 property in Allegheny County typically pays $15,000/year in property taxes. This is double the tax rates as compared to Georgia, New Jersey, Ohio and California. Now these states have higher income and sales taxes, but the fact is Allegheny County property taxes are still almost double everywhere and anywhere else. To make matters worse, Pennsylvania has allowed a taxing system that intentionally discriminates against certain property owners, and has refused to help remedy this situation by ignoring what was supposed to be regular and periodic reassessments of properties.

1. The Allegheny County Assessments are Outdated and Unfair

Allegheny County assessments are supposed to be uniformly applied to all property owners in the county. Taxpayers are supposed to be treated equally. In Allegheny County, property owners are not taxed equally.

Property values in western Pennsylvania have steadily increased since 2012, yet the property assessments have remained frozen in time, unless a sale occurred. This has prompted numerous studies to conclude that the Allegheny County assessments are fundamentally flawed.

If two properties are identical, should one property owner pay twice as much in property taxes as their neighbor? Of course not. Yet this situation is happening all across Allegheny County. It happens, when only one of the properties sell, and the school district files a tax appeal to increase that specific assessment, but ignores the assessment of the neighbor.  For example, in Ben Avon, there are two homes that were both assessed in 2012 by the County at approximately $300,000.00. In 2018, the one property sells for $600,000 and of course the school district appeals and eventually wins raising that property assessment to $565,000.00. This creates a system whereby the county determined in 2012 that the properties should be taxed evenly, but instead the property which recently sold is now paying more than $7,500.00 in property taxes above their exact same neighbor on the street. This is not uniform or fair taxation. The recent homebuyer is being punished based on their purchase price. Once the school district singles out certain properties to appeal, it creates an outdated and unfair taxation system. Experienced attorneys in the tax appeal field almost unanimously agree.

Attorney Nicole Hauptman Amick, a tax appeal lawyer who has handled thousands of property tax appeals over the last decade, believes a reassessment is a necessary first step to changing this fundamentally unfair system. "Allegheny County absolutely needs a reassessment because the current system treats identical properties differently. If you recently purchased, and the school appeals, almost inevitably that property is paying considerably more in property taxes as opposed to the other neighbors on the street who have not recently sold. This creates an unfair tax burden for recent homebuyers and singles them out, which should be illegal under the uniformity law. Only a reassessment can fix this inequity."

2. The Allegheny County Assessments Are Allegedly Discriminatory

A recent article on publicsource.org analyzed the potential discriminatory implications of the current property tax system in Allegheny County, which freezes assessments, but allows spot appeals. The system creates winners and losers. If you have owned your property for a long time then you are probably a winner, and if you recently purchased a property for considerably more than it was assessed in 2012, then you are probably a loser. Another demographic that is potentially losing in this archaic and unfair system is minorities and lower income areas. 

First, lower income areas typically have tax millage rates two or three times as high as other areas in the County. For example, in Wilkinsburg, a $100,000.00 property pays over $5,500.00 in yearly property taxes versus a North Allegheny property which if assessed at $100,000.00 would only pay about $2,200.00/year. In these situations, even modest assessment increases could mean thousands of dollars in increased property taxes. Studies have shown that lower income property owners are less likely to defend an assessment appeal or hire legal representation concerning their property taxes, which further compounds the inequity.

Second, the more you raise the millage rate for taxation, the lower the property is valued. So the system actually reduces property values in low income areas even greater by increasing their property taxes. The higher the property taxes, the lower the sale price. The process of unfairness feeds on itself and Allegheny County's failure to act in the form of a reassessment allows greater disparity every single year it continues.

3. New Law Proposes to Ban Tax Appeals Against Recent Homebuyers

 

In April 2022, the Senate Urban Affairs and Housing Committee met to advance HB297, a new law that would hold that spot appeals (i.e. appeals filed by school districts) would be considered illegal because they would be treated as 'spot reassessments'. The bill would eliminate the ability of taxing entities to file tax appeals against recent homebuyers based on a purchase price. While Pennsylvania law through the state's uniformity clause prohibits individual properties from being singled out, this has not stopped taxing entities from filing tax appeals against recent homebuyers.

The new proposed law would ban a taxing entity right to appeal the assessment of a property based solely on a sales price. It would also limit the ability of a taxing entity to appeal to limited circumstances such as a reassessment, a subdivision, change in use of the property or a change in physical characteristics of a property, such as a building permit.

Even if this law is passed, and it limits new appeals filed by school districts, what about the 75,000+ property owners who have already been appealed and had their property taxes raised. If this law is passed without a mandatory reassessment, it would create another level of unfairness based on when the property was purchased. While the proposed law is a good first step, it must also address the property owners who have already been appealed, and the only way to do that is through a reassessment process.

Conclusion

Property taxes are necessary for education and public safety, but they have to be administered uniformly and fairly. Allegheny County's outdated taxation system of not periodically reassessing, while allowing the school districts to spot-assess properties through the appeals process is unfair and unconstitutional.

It is time for a reassessment in Allegheny County, and also time to mandate that reassessments occur periodically (every three (3) years) to ensure that everyone is treated the same with regards to their property taxes. Instead, Allegheny County leaders have chosen to bury their heads in the sand, and allow a system that discriminates against property owners, is outdated and unfair. 

Noah Paul Fardo, Esq.

NPF@pghfirm.com CELL: 412.855.5511

Attorney Noah Fardo is a top Pennsylvania trial lawyer with over 22 years experience handling personal injury, medical malpractice and tax appeal litigation. He is a life member of the multi-million dollar advocates forum which membership is limited to less than 1% of lawyers nationwide.

Flaherty | Fardo | Rogel | Amick

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