In this episode our property tax specialist, partner Nicole Amick, is joined by partners Shawn Flaherty and Bill Rogel to dive once again into an in-depth discussion of the current state of property tax assessments and appeals in Allegheny County.
If you own property in Pittsburgh or the surrounding areas, this episode is, as aways, required listening.
Nicole highlights the impact of recent tax rate changes, the importance of timely appeals, and the ongoing push for a county-wide reassessment, as well as the necessity of preparing to file an appeal now before the September 1st deadline. It will be here sooner than you think!
Contact Nicole for a free consultation at nicole@pghfirm.com
speaker-0 (00:00.61)
Please rise, court is now in session.
speaker-0 (00:05.8)
I strenuously object. A legal podcast brought to you by the Pittsburgh law firm of Flaherty Farto is now in session. All those seeking information about the law and legal matters affecting the people of Pittsburgh and the Commonwealth of Pennsylvania, half-baked opinions and a dose of self-indulgence are invited to attend and participate. True, you. True.
speaker-1 (00:24.345)
What the
defense renuously objects you call the first
speaker-2 (00:32.557)
What?
speaker-0 (00:34.706)
All over Allegheny County, millage rates are going up. School districts are raising rates. The city of Pittsburgh is raising rates. Commercial values are the bottom is falling out of that. The schools and the governments, they need revenue and they're making it up by increasing their tax rates. What does that mean? How has that changed the environment around property tax appeals?
speaker-1 (00:57.368)
Well, it's changed in a couple of different ways. As you said, there are many tax offices that are in deficit. So that is making them file appeals on very small cases and also fighting the appeals that they file very aggressively because every dollar to them counts. So it's definitely changed the way that they've been approaching these appeals. And it's also changed kind of how I'm approaching appeals in terms of property owners taking advantage of this as well.
speaker-0 (01:22.798)
And I think the idea of small case has to have changed too, right? mean, if my taxes have gone up 30%, the stakes of my tax appeal, if I can get a cut, are 30 % higher, yeah?
speaker-1 (01:34.926)
Correct. And I mean, again, with the millage rate being as low as it is now at about 50%, we don't know what it will be this summer for 27 appeals, but it kind of changes the metrics of who it makes sense to file appeals against. Whereas typically school districts used to focus on relatively large potential increases. Now I'm seeing them file appeals where they stand to gain best case $500 a year total across all the millage rates. So
homeowners that may have been in the clear before are now looking at this thinking they're really taking the time to file an appeal against me and yes, they are.
speaker-0 (02:09.398)
Look, here's the thing. If you haven't filed an appeal, if you have a good case and you're not filing an appeal anyway, you're missing out. If your neighbor files an appeal and your neighbor on the other side files an appeal and everyone in the community gets their property taxes reduced and you haven't filed an appeal and then your school district raises its tax, its millage rate, the end result here is your taxes are going up. You may as well be, you know, having your taxes double if you're not taking the advantage to at least look into whether or not you should be appealing yourself.
speaker-1 (02:39.348)
And this is, you highlight a very good, compelling reason, one of the many of why we need a reassessment in Allegheny County. The residential property owners are the ones that are being negatively affected the most based on the rapid loss of value in commercial properties. Because as that tax base has fallen out, they paid a lot of taxes. Now they don't anymore. So who has to pick up the slack? Residential property owners. And the way that that happens is
people that have maybe lived in their homes for a very long time see their tax bills, even though nothing has changed, their tax bills are going up, up, up, up, up as the millage rates keep going higher to compensate for that loss of value on the commercial side. So again, one of the many, many reasons why we need a reassessment in Allegheny County is because this has really negatively impacted residential homeowners.
speaker-2 (03:27.916)
Now Nicole, regarding the commercial reassessments, because that's where the municipalities and the school districts have traditionally got alliance stake share of their income and their revenue. But now that those are so since COVID, they've just like wilted away. What's going to happen with those remaining construction or commercial properties where they are thriving and
That's where the municipalities are gonna go to put these high numbers on these properties. What are your thoughts?
speaker-1 (04:01.55)
that. We've seen, think there was a calculation done of two billion dollars of value lost in commercial properties in Allegheny County. So for taxes, it depends on where that is, but that's, you know, hundreds of millions of dollars of tax base lost. So the way that they're each of the tax bodies that file these appeals are approaching commercial cases is again way more aggressively than before, because again, they need every dollar that they can get their clients.
especially when these appeals last multiple years or having to refund large amounts for past years, having to lower their tax bases for this year's that's really, causing some strain and many of the offices that are handling these. I've spoken with many solicitors about this where commercial property owners that do have high rents, you know, are doing well. they're also kind of being punished for this as well, because yes, that that is helpful for their business, but their taxes might, might be much, much higher than, you know,
a neighbor in commercial property. one of the weird things about appeals is once you settle that case, say the next year, you do get that high income tenant in, your tax base is still much lower than maybe your neighbor who has a similar tenant now. So it's negatively impacting everyone. Again, the brunt of it is on residential property owners, but commercial property owners, you I handle many commercial cases and they're struggling with this as well.
speaker-2 (05:22.296)
What about the commercial owner that has leases that are going to expire within the year, within the next 18 months, and the chances of them releasing at the former numbers are not the same as what they were. What about those commercial owners?
speaker-1 (05:38.422)
So a good example of that is Rite Aid. With Rite Aid declaring bankruptcy kind of overnight, there was, I don't know how many in Allegheny County, maybe 50 properties that were making a lot of money on Rite Aid tenants, triple net tenants, were paying a lot of money that basically vanished overnight. So we have all these vacant Rite Aid buildings. I'm handling many appeals in Western Pennsylvania relating to these properties. They're not going to ever make that much money again on a lease, probably, just because they were paying
Rated had been there for a long time. They were paying a lot of money. So those appeals, many of which were filed last year, but I'm sure more will be filed this year, those property owners have a very strong case because again, the money they were making before is not going to happen anymore. So those are the people that need to get ahead of it. Even if it at least is expiring next year, if you know you're gonna have problems with vacancy, now this summer would be the time to file it.
speaker-0 (06:31.126)
You can almost see the future memes rolling downhill at us, right? I don't know if you've seen all the websites of all these buildings that used to be Pizza Hut's, right? It became a real thing where people would take pictures of all these buildings that used to be Pizza Hut's that have been repurposed into other things, but they had such a unique architectural kind of setup that you can tell when something was a Pizza Hut in 1996, even if it's a bank now or whatever. I can only imagine that we're going to see
Hopefully a lot, but at least some of these Rite Aid buildings being repurposed and you know, they're going to be visually obviously pharmacies, even if they're doing other things.
speaker-1 (07:06.998)
Yeah. And I've spoken again, not, not even just in Allegheny County, but in Western Pennsylvania in general of these property owners. mean, they're getting basically no interest across the board. and if they are, it's pennies on the dollar type of situation, but you know, car washes things that like kind of don't make sense there. but either demolish the building and just take over the lot, or again, you're making.
a quarter of what you were before. So that's been detrimental to these people who are still paying on very high taxes typically because when Rite Aid was there, that was fine. Rite Aid was paying the taxes, they were paying high rental amounts. Now all of a sudden these property owners are scrambling because the situation's changed very drastically.
speaker-0 (07:46.208)
And commercial cases are different anyway, right? That is to say, residential cases, typically the critical evidence that's used in reaching a resolution or battling the appeal has to do with looking around and finding comparable sales in the same neighborhood, the same street, the same area. But for a lot of these commercial properties, you've got to get assessments, and those assessments are based upon their leases, their actual income, like the actual books and bookkeeping associated with the revenue being generated by these properties, correct?
speaker-1 (08:14.296)
Correct, when you're getting an appraisal done, it's taking into account, you can do a sales comparison approach. It's obviously much more difficult with a commercial property, not going to be as typically as apples to apples as a residential plan, for example. But yes, and that's why I think with Sean's question of people that are, they know they're going to be losing large anchor tenants or they're worried about that, or they've had long vacancies, those are the people that need to file appeals now because all of that can be taken into account, especially in those situations where it would really help you.
in many situations argue that the assessment is too high right now.
speaker-2 (08:46.914)
You know Nicole, you mentioned file appeals now. Can you tell me a little bit about the deadlines and when they're up and when they're due?
speaker-1 (08:53.614)
Sure. So Allegheny County just switched a couple of years ago to a future appeal system, as I've been calling it right now this summer. So from July 1st, 2026 to September 1st, 2026, we can file 2027 appeals. So what we are doing this summer in Allegheny County is basically filing appeals for next year. And that's the way that Allegheny County is doing it. And again, the deadline for 2027 appeals will be September 1st.
speaker-0 (09:21.4)
So we can't start filing appeals for 2027 until July 1st, but we can get out ahead of that deadline a little bit and start the process sooner. I shouldn't wait until July 1st to call you,
speaker-1 (09:34.392)
Correct, I already have many clients that have retained me for 2027 appeals. Obviously I cannot file the actual appeal for them, but they're basically on my list. The day that it opens, I'm filing those appeals. I want to get that ball rolling as quickly as possible because this appeals process takes a long time. And especially if you're having some issues with income, you're going to want to start saving money as quickly as possible.
speaker-0 (09:54.88)
Now, if I can't file an appeal yet, is there anything I can do, any filing I can make right now that might save me some money on my property taxes?
speaker-1 (10:02.764)
The only thing would be if you're a residential property owner, you can file a homestead exemption. That's due March 1st. So that's a week from shooting right now. That doesn't save you all that much money anyway, but it is a free mechanism to save some county taxes for residential property owners. Unfortunately, there's nothing we can do right now for 2026 taxes because the deadline to file was last year. But one thing that people can do now is get ready.
Talk to me, reach out to me if you want to, or at least take a look so you know what your assessment value is. Because then you might have a better idea of, this seems a little bit too high. As a rule of thumb, the assessment right now should be about half of what your property is worth. So if you think your property is worth $100,000, your assessment should be about $50,000. So sometimes I talk to people and they don't even know what their assessment is. That's a good place to start. Go to the county website, you can Google it.
Just try to figure out, you know, if it's something you need to consider, if you think your taxes are too high for commercial property owners, start looking at your income. I like to get appraisals even before I sometimes file an appeal. Just so again, we're ready to go get the ball rolling as quickly as possible.
speaker-0 (11:10.924)
Now, back in the day, I'm gonna put on my old man hat. I mean, I guess that's just my hair. You guys can see that anyway. Five years ago, 10 years ago, 15 years ago, people would talk about the property tax and the property tax appeal system as this welcome to the neighborhood tax, right? You move in, you buy a house, and the first thing you get in the mail is a letter from the county or from the school solicitor appealing your taxes and trying to increase your assessments, your taxes go up.
Is that still happening and how is this environment different with the CLR at 50 % or lower?
speaker-1 (11:45.294)
So the common level ratio in Allegheny County over the past approximately five to six years has dropped more than 30%. So when you think about what that means, that's very advantageous to property owners, not so much for school districts. So yes, school districts are still filing appeals, the welcome to the neighborhood appeals as we call them, not nearly as many as they used to, just because again, the metrics have changed typically.
the purchase prices are not supporting as large of increases as they used to assessment wise. I think last year there was maybe 5,000 appeals filed by school districts and past years it's been 15,000, 20,000, 30,000. So it's definitely dropped down, but there still are certainly thousands of appeals being filed by school districts every year.
speaker-0 (12:31.148)
What about new constructions or plans where people are buying lots and putting houses on them or alternatively buying lots that just have freshly had a house built on them? What is the current situation environment for those properties?
speaker-1 (12:48.11)
So what I've been seeing kind of interestingly with new construction in Allegheny County, number one, it's not always the same, but a lot of what I've been seeing is that when new plans are going in and, or just a single house is going in and there is a listed purchase price of some kind, the assessment value when it is ultimately given out for that property has been very high. Again, not always, but in a lot of these plans, the assessments have come out anywhere from 70 to 90 to 95%.
of a recent purchase price, which doesn't make any sense given what the common level ratio is, but I've been handling a lot of these appeals on these large residential, you new construction properties because the assessments are just astronomically high.
speaker-0 (13:30.338)
When you have a property with a new construction, the county basically administratively without the appeal process comes in and sets a new assessment value. Is that right?
speaker-1 (13:43.96)
Correct. Once there is a permit for a building, obviously, once that closes, meaning building has completed and an occupancy permit is given out to that property, meaning you can move into the property, Allegheny County, the Office of Property Assessments will automatically issue a new assessment for that property, basically taking into account that a structure is now on the property. Once you get that in the mail, you have 30 days to appeal it.
So a lot of times I'll have people reaching out saying, hey, I just got this, what is this? It's just a one page simple document that shows this is what the county says your property assessment is. Again, when I've been seeing that lately, they've been generally very high. So I've even told people, tell all your neighbors, I don't care if they hire me or not, but everyone should be appealing your assessment because all the assessments are way, way too high. And that's just kind of the trend that I've been seeing the past couple of years.
speaker-0 (14:37.134)
So the CLR is, you know, down around 50 percent. And here we're seeing in the vast majority of these new construction cases that you're seeing when the county is coming in and setting and assess the value, they're setting it, you said what, 70, 80, 90 percent of the sale price instead. They're not applying the CLR.
speaker-1 (14:56.046)
I don't know why, I don't work there, so I can't speak to why that's happening, but I've even seen somewhere it's almost 100 % of what someone just bought a property for, like a listed purchase price, and the assessment has come in at almost 100 % of that, which as soon as I see that, number one, I get annoyed because why, and number two, I say, you need to appeal this. Whatever you do, appeal it immediately, because this is clearly too high.
And we should be at half of what you just bought it for, which in many of these cases is a significant tax reduction.
speaker-2 (15:27.724)
Nicole, do you see the same things? This same items when it comes to just filing a permit for a remodel or new construction around of an already existing property?
speaker-1 (15:39.032)
was just having a conversation with the property owner about a permit. This was for a garage. So permits can be required for all sorts of things, fences, garages, additions, things like that. Unfortunately, it's hard for me to answer that with a blanket answer just because I can see a lot of different outcomes in terms of how the office of property assessments deals with those. But the way that it deals with it generally is once that permit closes for whatever you're doing, typically they will issue you a new assessment value for your
And what that new assessment value is taking into account is the new updated value for your property in general. Not just taking into account the work that you've done, but now that you've done that work, this is what we think your property in total is worth. So sometimes what we get are these situations where someone will put on an addition, say a thousand foot square foot addition, and the property value jumps way higher than what the value on the building permit was.
And that might be a property that they hasn't sold in a long time and the assessment was previously very low. So we see these situations sometimes where the assessment increases are much higher than what the actual addition would support or the permit would support, but it's because the county is taking into account the total added value at that property and looking at it kind of as a new property. So we see a lot of that and similar to what we were saying before with new construction, when a building permit is closed, the office of property assessments will mail out
a notice of assessment change, like I was saying to Bill before, it's a simple document just saying, this is the new assessment value on your property, and then you have 30 days to appeal that. So again, that's a situation where I say, send it over to me, let me take a look, kind of need to take into account all the information about the property, but you do have 30 days to file that appeal.
speaker-0 (17:21.208)
So we can add this to the list of problems that with the current system where we haven't had a reassessment in a dozen years now, it's been so long. Obviously it creates unfair burdens on, while we were seeing this specifically on residential homeowners in comparison to commercial property owners. And we're seeing an unfair burden on people who have been holding onto their property for a long time, who maybe aren't getting the benefit of the
the new CLR in the time that's passed. But now we can add to this that we're actually creating a perverse incentive where, boy, I don't think the county wants to be in a position where it's encouraging its property owners to do work without applying for building permits. But boy, I'm sure if people are doing kind of small work around, especially if it's small work around their property, but applying for the permit means getting their property reassessed.
Yeah, they're really creating an incentive to try to run an end around around that system.
speaker-1 (18:22.414)
I get that question all the time about do I need a permit for this? Should I get a permit for this? And I'm by no means an expert of all the permits that are required in every single township and borough across Allegheny County. There's, I believe, 67 of them and every borough and municipality has their own specific rules. But I always say, you know, talk with your contractor. If you need a permit, obviously get it. But if you don't, don't. Because again, you're kind of opening the door to you don't really know what's going to happen.
speaker-0 (18:51.424)
Is there any update? Have we heard anything beyond kind of what's just out there in the news obviously about the prospects for a reassessment?
speaker-1 (19:00.814)
So just so we know, sorry, I'm gonna go back to this for a second. There's 130 municipalities and over 80 boroughs and townships in Allegheny County. Wow, that's a lot. Okay, sorry, can you repeat the question?
speaker-0 (19:15.318)
Yeah, what's going on in reassessment world? It remains in the news since the last mayoral election and before that, look, the system is out of whack and the only way to fix it is a county-wide reassessment. Everyone knows it. No one wants to do it. There's court cases pending. Any news? Where are we now?
speaker-1 (19:34.648)
So there's no, unfortunately, exciting update that a reassessment is definitely coming. But like you said, everyone knows that we need one and everyone knows that we will eventually get one. It's just a matter of no one wanting to be the one to say that we have to do it. So it's going to have to be a judge ordering it through one of these pending litigation suits that have been filed. There's one pending from the city of Pittsburgh school district.
you know, is going through discovery and they're having all these conversations and delays. They had to bring in an out of county judge. So basically everything is taking a really long time. I thought it was interesting that Allegheny County council last month passed, a loop exemption for they're kind of trying to get ahead of the reassessment that they know will eventually be coming. And that's a certain tax program that will help senior citizens in a certain income bracket that have lived in their homes for a long time.
not be crushed when a new reassessment number comes out. It basically limits the amount of county increase that can happen to a property when the reassessment happens. So it's like everyone acknowledging that it will happen, it needs to happen, but no one wanting to be the one to say, okay, we're doing it now.
speaker-0 (20:48.526)
And it takes time to get from the court order to a reassessment itself, right? mean, last time it took a couple years from the time that the court ordered a reassessment to the time that they then hired a company to do the reassessment to the time that the reassessments then came out to everyone in the mail. It's not an immediate process where the data reassessment gets ordered by the court. So, you know, we may be stuck with this system already through at least 2027, even if a judge ordered
a reassessment tomorrow. Yeah.
speaker-1 (21:20.14)
be longer than 2027 if a judge ordered a reassessment tomorrow. Last time I think it took three years for new values to be certified by the county. And then what Allegheny County did was they waited another year to put it in effect so everyone could file appeals in the year before. So it was essentially four years from court order to new value. so I think we're going to, it's going to be a while. That's a question that people ask me, should I file an appeal this year? I think a reassessment is going to happen. And I say,
Number one, I don't know what's gonna happen. No one does. So yes, you should file an appeal. And even if someone says today, we're gonna do a reassessment, it's gonna be multiple years before that new value is gonna kick in.
speaker-0 (21:59.726)
We've got people who are already two years deep, three years deep on this exact weight where they didn't file an appeal back in 2024 because they figured, eh, reassessment's coming right around the corner anyway. Now here we are, you're going to pay taxes two years, three years, four years on that figure. Trying to guess how long it's going to be and then price that in sounds more likely to be a mistake than anything else.
speaker-1 (22:23.106)
Yeah, and mean, there's 600,000 properties in Allegheny County. So when you think of it and the way that there's the way that value works in different areas of the city, different areas of the same municipality, it's gonna be a long process even when one is ordered. So I always say file an appeal now. It's gonna save you money for multiple years. And again, who knows when we might get new values.
speaker-2 (22:45.462)
Nicole, there's a ad in on the county regarding the assessment. Do you have a copy of that? Can you tell us what it says?
speaker-1 (22:54.444)
I do. So this was new this year. I don't remember ever seeing this. I got one at my house when I got my county tax bill and it was a 2026 treasurer's bulletin. So this was like a an enclosure with your tax bill and on the second page and I'll just show you what it looks like but I can tell you what it says but it was like a little inclusion basically telling you you have a legal right to appeal your assessment and telling you how to file an appeal.
telling you that the appeal window opens July 1st, 2026 and telling you that the appeal period ends September 1st of 2026. So I thought that was kind of interesting. I've never seen that before of them kind of saying you have the right to file an appeal and here's the deadline. So I think that's great that they're giving that information out to people, but I was a little surprised to see it.
speaker-0 (23:43.726)
Yeah, if I got that kind of notice on my tax bill, is there anything different I should do?
speaker-1 (23:48.44)
This I think was just for everyone, for every person that was getting this from the county. was just again, of like this little, little in the corner, just like a little by the way type of thing. But again, I just, when I got my bill and I opened it up, I've never seen anything like that. Usually it's kind of hard to find that information. So if anything, hopefully this will again alert people to the fact that you should know what your assessment is and take a look at it to know if maybe filing an appeal might make sense for you.
speaker-0 (24:15.126)
Yeah, I can only assume the county is sending this out because they've decided there are people who don't know their rights, don't know that they're allowed to appeal. And you're saying before, right? If, if you live on a house with 10 other homes and nine of them file an appeal and you don't, once you're, once the local taxes go up, it's, it's, it's almost like you got a tax increase as opposed to nine other people got a tax cut. So.
If you don't know your rights and don't know to look after an appeal and the county is worried that there are people out there who don't, maybe this will let people get out ahead of that or make sure that people aren't carrying that unfair burden.
speaker-1 (24:51.886)
And it might honestly, now that I'm thinking about it, be a reaction to the fact that the county millage rate increased by like 30 % two years ago, um, from, well, from 24 to 25. So I got a lot of phone calls and emails from past clients saying, Hey, my assessment went up. What happened? I didn't think we had an appeal and I had to look at it and I would say, no, nothing changed. Your taxes just went up because the millage rate increased significantly. So that's happening across school boards, municipalities and the county now. So, you know, your assessment.
may be the same, but your taxes from five years ago are probably a lot higher.
