Why You Need to Appeal Your Allegheny County Property Taxes NOW

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I strenuously object a legal podcast brought to you by the Pittsburgh law firm of Flaherty Fardo is now in session all those seeking information about the law and legal matters affecting the people of Pittsburg and the Commonwealth of Pennsylvania half-baked opinions and a dose of self-indulgence are invited to attend and participate I want the truth you can't handle the truth the defense strenuously objects you would call the first witness hello hello loyal listener and welcome back to I strenuously object merry Christmas happy New Year uh whatever the appropriate seasonal greeting for the time that you're actually listening to this episode uh may be we are here today uh I am attorney Bill rogel uh partner in the law firm Flaherty Fardo I am joined by the queen herself and another partner in the law firm Flaherty Fardo Rogel and Amick uh Nicole Amick is here joining us as well and today we're here to talk about the three reasons why 2024 might be the best year ever for you a property owner to appeal your taxes hi Nicole good morning Bill before we get into this more fully I just want to backtrack a little bit I know that you know we have short memories even as the internet has longer and longer memories but I'm pretty sure we just said the same thing about 2023 but we'll address why 2024 might be better still but first does the defenses case hold water the defense is wrong so yeah anyway here we are 2024 is just recently upon us and property owners in alany County have what seems like it might be an even better opportunity than last year to appeal and I'm going to provide you three reasons why reason number one CLR it's 54.5% for next year Nicole what does that mean bill as you said the common level ratio the CLR is 54.5% um which is the lowest it's been in 20 plus years probably the lowest ever maybe um but what that means is as property values have continued to go up from covid which isn't really happening anymore the common level ratio kind of catches up to that um last year the common level Ratio or 2023 the common level ratio was 63.6% so there's a a 9% reduction in one year which is a really large reduction so like we said last year kind of nauseum uh we continue to say property owners are in a great position to be able to appeal their property taxes yeah so let me let me put a a slightly more practical bent on what this means right if you bought a property last year uh and your sale price was $500,000 let's say you're assessed at $380 or $400,000 from from before that's the assessment that you inherited when you bought the property you might think well I bought it for $100,000 more than that so I don't want to appeal I'm happy to keep that old number but here's the thing if your current market value is set at f a full $500,000 right the amount you paid and then the CLR gets applied to it what you should actually be be getting assessed at is going to be something in the neighborhood of $280,000 and so you could be saving $100,000 off your assessment even if you paid $100,000 more than what your current assessed value is right that's the power of this CLR and it's just math um it is it is literally how the county is supposed to apply a figure to what they find your current market value to be to set your actual assessed value yeah and I'll use an easier example because math is not my strong suit but say you bought you have an assessment value of a million just to give us a round number uh the difference of of ratio here is going to be almost $100,000 just just from the ratio change alone $100,000 of assess of assessment value now in 2021 the the ratio is 87.5 so in 3 years we've gone down what is that 33% of ratio so for people that were appealed in 2021 for example a lot of those people are assessed at 87.5% of what they just recently bought a property for those are a lot of the cases I'm reviewing now because those people even if their property value has gone up to some extent since their purchase it hasn't gone up 35% uh in value since that time so when you start getting into the numbers and applying the math even even small changes can can create big tax savings so I I do have a question about that I suppose if I bought my property back in 2020 or 2021 and then I appeal now I can't just use that 2020 or 2021 sales price and assert that that's the current market value and then apply the CLR to it can I no and that was a lot of the confusion that I've talked to Property Owners about that are losing their appeals this year they were looking at 2017 2018 purchase prices and saying hey the the ratio's gone down since I bought apply it to my purchase price and I should get a lower assessment value that's not how it works um rather the current ratio applies for the value of your property in that respective year so for example in talking about 54.5% that will be the ratio for 2024 appeals what is your property worth in 2024 whatever that number is you then apply the 54.5% and that should be your assessment value now presumably if you have a 2020 2021 purchase price there may some appreciation in that a small amount of appreciation we're not seeing the market trends that we had been seeing certainly we're not anywhere close to a CO Market anymore um but yeah it does require a bit of research to get there again just looking at the massive changes of ratio though there's a lot of property owners right now that are in a great position to file appeals okay so don't assume necessarily that this CLR applies to your five or six or seven year old sale but the closer in time your sale is the more likely that your sale price is going to carry more weight uh in determining the current market value correct and even if you did have a 2023 sale for example uh in filing an appeal you can't just use that regardless you have to have other supporting evidence to get a successful reduction so regardless of when your sale is you do have to bring in supporting documentation but certainly the more recent the sale is the more relevant it would be for an appeal okay reason number two why 2024 might be uh the best year ever to appeal your taxes as a property owner owner is that mortgage rates over the past year at least have been up obviously when mortgage rates go up if people are kind of working backwards from what they can afford in terms of a monthly payment you see what you would expect which is high mortgage rates end up pushing the prices of sales themselves down but when you're appealing your property it's the sale price of the property itself not taking into account what your mortgage rates are that ends up being the evidence for what your property's worth yeah and you know you know I research properties every day as part of the job and during the co market with the the market rates or the mortgage rates being so low you were seeing these crazy purchase prices that just didn't really make a lot of sense when you looked at the market as a whole but because the rates were so low the monthly payments were so low and people could afford it now because the rates are you know three or four percent four four times higher um you're not seeing those sales anymore so as the new sales are coming in the new data is coming forward we're seeing things really leveling off um even sometimes I'll look at a zestimate even though that's not a real piece of information just to give myself an idea zestimates a lot of times now uh when I'm looking at 2022 2023 purchase prices are lower than what people bought their property for which a couple years ago you were never seeing that so we're really seeing that starting to change kind of how the Market's operating right now that's right and one of the things we we we just talked about the CLR right one of the things to bear in mind is that the CLR lags um the actual value of real estate right it's based upon data from a couple years ago and so right now you have a chance to apply a CLR based upon the hottest market we've seen and apply that to sales from this past year where the prices themselves were starting to come down because the mortgage rates were going up and so on correct that's correct and you know I I update my system every three months so as I start seeing these sales again still kind of new seeing these Mor these mortgage rates impacting the values but you know 2023 sales now getting into 2024 I imagine those sales are going to be showing us the same thing so all of that new information again not totally depending on an older purchase price but again we're not seeing those crazy high purchase prices anymore and it's really really helping uh in terms of researching and the strength of these property owner filed appeals and you know alany County hasn't had as big fluctuations in the real estate market as you've seen in some other places but still it's significant and uh it's setting up TimeWise here to really be a golden opportunity uh to to take some measure of Advantage from those fluctuations now I I guess my concern is whether there's a reassessment coming in the near future or not you know is there going to be a situation there on the back end where uh the the CLR adjusts to the mortgage rates going up a couple years down the road and now all of a sudden the CLR goes you know significantly higher whereas the sales prices uh are not listen I'm strenuously objecting I'm not not even invited to this podcast so I need you to stop the show stop the show I want to Lodge two objections for the record number one uh I think you can use sale prices from 2018 19 and 20 as the current market value because prices peaked at that time and a lot of those buyers overpaid so when you tell people that they can't use past sales I think you can and I'm going to Lodge my objection on the record the second objection is the fact that you're saying mortgage rates went up therefore prices are going down because people are paying more and can't afford as much but the stats don't always prove that some Studies have shown that higher mortgage rates are actually increasing the price of the reduced inventory because less people are putting their homes on the markets right now so just two objections for the record no I wish you were a hearing officer because in the actual hearings they don't want to hear about those old purchase prices I understand what you're saying now again it doesn't really matter what your purchase price was from a few years ago anyway because a purchase price by itself does nothing for a property owner in in establishing a case um but yeah I mean I think you know I wouldn't say 2018 was the top of the market but I think you know looking at research now 2020 2021 purchase prices my opinion of a current value is probably pretty close to those depending obviously on the situation because the market has slowed down so much yeah I mean I don't think anyone is going to tell you that your 2018 sale is inadmissible um and they will not hear it but they're pretty likely to weigh not just more recent sales of your property but comparables that are actually closer to the current value of the property those are going to be the real evidence that's going to make or break a case even when there was a sale back in 2018 or 19 the market has changed so much that no one's going to Accord significant value to one of those sales look as far as the the economic question of how exactly it is that mortgage rates affect property prices you know I can only defer to articles and accounts that I've read and the fact that we are in fact seeing a cooling and not a heating of the the real estate Price Market in response to the increased uh mortgage rates but but I you know I don't know there's a bunch of variables there right maybe something else is causing home prices to you know to reduce or at least to cool their increase and it's not related to the mortgage uh the mortgage rates going up but uh I am not here to give my economic analysis yeah one thing I'll say is you know I talked to a lot of property owners every day and especially for people in like the the you know two 300 $400,000 range the mortgage rates right now are having such a large impact that mortgages on a house would be double now than what they were like two years ago for the same house so you know it no matter what price range you're in that's going to make a big difference in terms of what you can afford so there is a lack of inventory which you still see weird sales but again the average person can't pay double you know what they were going to pay two years ago and I really think that again when you're looking at those sales you know it's really having an impact on the value of a property two things uh kind of related to that leaving aside the actual assessed number right the assessed value of a property um just kind of breaking it down in terms of what you as a recent property owner who's pretty stretched out um and are faced with pretty high mortgage payments uh where is it that you can find find some reductions right have some effect on your cut your monthly payments affect that monthly budget and one of the places where's a little bit of money to be had uh is in appealing your assessment if you if you have one of these recent sales right you can't you can't refy yet um your mortgage rate isn't going to go down particularly but one of the things you can do uh when every dollar counts uh is seek out a reduction in your property tax bill um and that will in turn cut your your escrow or your monthly payments or whatever you're facing uh on a monthly payment front yeah I mean I talk to again people in a wide range of situations but you know a lot of people that I were were was helping this year had both a 2022 and 2023 owner filed appeal I'm starting to get those decisions back even small changes in assessment over a period of years can have a really big impact on you know what you're paying monthly and what you're paying monthly moving forward one thing I want to flag here as well um this is me grinding a local ax a little bit right I live in Plum uh Plum just imposed basically an almost 40% tax increase property tax increase on the municipal tax rate uh that's just the millage went up by that amount um to cover for some budgetary concerns or whatever I don't know I don't know how we got here all I know is nobody likes to hear that their local taxes are going up by that much I don't imagine Plum's going to be the only one in that position one of the things a person should think about when they're thinking about what the value of appealing their assessment is is is not only to consider how much taxes they're standing to save at the current millage rate imposed by their school board or their municipality but how much do they stand to save if those rates go up yeah and I think that's a really important Point like everything else millage rates basically never go down they're just going up perpetually and I think next year we're going to see more of that because we're just now starting to get the decisions for 2022 in 2023 so I'm starting to see these kind of large reductions across the board for people that are over assessed taxing bodies have to start issuing refunds which they hate doing as you would imagine um and as we continue to see that and as more owner filed appeals continue to kind of roll through um the tax base goes down and the only way that they can deal with that as a school district or a burough is to increase the millage rate um which affects everybody so until we have a reassessment which hopefully will'll happen in the next few years that's just going to continue happening and again I think we're going to see a lot more of that next year which I I won't be surprised I 40% is a lot my assumption in Plum is that's because Rustic Ridge now has all those contempt properties that aren't on the tax roles anymore but um you know generally just across the county you know where I live I'm expecting my millage rate to go up next year and I think that the county just said that theirs isn't going up next year but again we're just kind of starting to see these reductions come through so next year I think is when we're going to see a lot of that happening across the board well and this leads me into what will be number three here right so there's a lot of uncertainty at the budgetary level being faced by everybody the county the municipalities the school districts as all of these appeals kind of sit and wait for determinations and as the CLR is for past years is being adjusted and readjusted by order of court or otherwise um everyone here is in a situation all of these School boards and burrow councils and whatever else they're left trying to do their budgets with these giant question marks looming over their head where they don't know if they're going to owe or how much they're going to owe in refunds for tax is already paid and they don't know what the tax rate on you know hundreds of properties in their specific District where there already appeals pending are they can't necessarily predict what the outcome of those are going to be and so as an end result right to solve this uncertainty there's a possibility of some pretty aggressive millage rate adjustments to make up for shortfalls as this shakes out um it's also true that one that reason number three why 2024 might be the best year ever to appeal your uh your property tax if you're a homeowner is they might actually get to your appeal this year that's the place where we were maybe a little bit off with our recommendations last year I don't think anyone foresaw the backlog being what the backlog has been we're going to link to an article in the Post Gazette about this they'll have some of the numbers that'll be available to to listeners here if you click on that link um you know but we're talking about you know something like 1,500 appeals from 2022 or 2023 that haven't even been heard heard yet not to mention you know another 2300 2400 or so where they've had an appeal hearing but no decision has come out and so we got a 4,000 case backlog just sitting out there where property owners don't know what B part's decision is going to be they don't know if they're going to have to appeal to the board of viewers the taxing bodies don't know what decisions are going to be what taxes they're going to be entitled to collect whether they're going to appeal to the board of viewers and a lot of these cases even after the board makes its decision initially they're going to get appealed they're going to go to board of viewers it might take another year or two to get to a resolution on some of those cases we're going to be talking about three or four years of taxes that are all now kind of wrapped up into the same appeal and hopefully getting some sort of outcome so on one hand anyone who files an appeal now for well not now but soon uh for for 2024 they're going to get stuck in line behind this backlog on the other hand all the taxing bodies uh are really starting to up the pressure on on the board of property assessment appeals and review to start giving decisions move the situation forward we can't keep budgeting year after year with big giant question marks and unknowns in our system so and I think you'll see if you see that article I don't know if you've read it Nicole looks like at least the people who were decision makers with the county agree that this backlog is unsustainable and they're going to try to actually address it going forward yeah I mean my expectation is that by this winter we should have all the decisions back from everything that's still out there uh personally our case load at our firm we're still waiting for probably 10 or 15 decisions for cases that were heard last summer um and we're still waiting for cases that were heard this year they just started issuing some of those so kind of going back to the point about the millage rates I'm getting decisions now uh they just made some decisions yesterday which I was just reviewing this morning on the website um large reductions across the board which is great for property owners but if you work for a tax office not so great because now you have to start issuing refunds when we're almost in 2024 for 2022 which has already been paid and 2023 so it goes both ways um there's also property owners that are recently getting decisions for appeals that were heard last year where the school district was seeking increases who now are having to pay additional tax bills for two years when next year's bills are also about to come due a lot of people have expressed their frustration to me of like what a nice holiday surprise right before Christmas to send me additional tax bills for 2022 and 2023 why did it take them so long Sur Sur so I get that both ways we've never been in a situation like this before for a lot of reasons but we've never been in a situation where this has taken so long so it doesn't benefit anybody to have it taking this long um my hope is that by this winter we're kind of caught up with bar boov is another situation but at least with bar we're kind of going through uh the good thing is if Property Owners appealed this this year for 2022 and 2023 even if we don't get the decisions until next year we're still talking about they still will relate to 2022 and 2023 but it's a mess I'm bringing my broom because you know why it's a mess it's a big headache for everybody everyone's frustrated with it for some reason they haven't been able to move through the decisions quickly I don't really understand why um but all we can do is uh hope that maybe they'll get through them uh My Hope Is that they'll get through them this winter this is the thing that's kind of frustrating about it right all of the decision makers on every level here agree nobody thinks this backlog is good everyone is frustrated by the delays the school districts the municipalities the county bar itself obviously the property owners everyone wants this to shake out and there's a period of time a short period of time we're kind of holding for a little bit to see what what shakes out with the court cases on the CLR regarding 2022 okay like a little bit of a pause makes sense so you don't make a decision and then immediately have a new appeal filed and have to start the whole process over again so I I get that but at this point I you know I don't see a whole lot more certainty coming down the pipe and it's really just a question of whether or not the Collective Agreement of all the decision makers is strong enough to overcome the inertia here it's uh you're turning a ship or stopping a train or whatever like whatever massive trans Transportation device you want to use as your analogy here uh just cuz everyone steering in the same direction doesn't mean it's easy uh to turn the boat or stop the train or whatever it is you're trying to do but I am encouraged to see that everyone seems to agree that that we need to get through these um and hopefully that means that people who file appeals in 2024 don't have to wait as long as those who filed in 2023 so my favorite part about that post because that article I just had a chance to read through it quickly is uh Amy shrimp is now the board solicitor David Montgomery retired or or left the board and she was quoted in that article saying the whole process is very convoluted well yeah what duh um I think everyone agrees it doesn't seem like anyone has a suggestion for fixing it or adjusting it or changing it but um anyway I think the pressure is on them there's been a lot of Articles recently just saying why is this taking so long no one is happy about it so I don't know what they can do on their end because I truly don't really understand how they make the decisions I don't think anyone really does um but you know hopefully the pressure will continue moving this all forward more quickly than it has been Nicole I think it's safe to say um that 2024 sets up to be you know as good or better a year to appeal than 20123 did um and a real golden opportunity for maybe not literally every single property owner in the county but for a lot of them so we're going to hammer people with this early and often so that they know uh tell me the timelines and the process for filing a 2024 appeal uh of your real estate tax assessment yeah so as you said bill I think this specifically for people that have never appealed before or people that were appealed sometime by the school district in the last five six years and never did anything about it those are kind of the people that I'm looking at and saying you need to appeal your taxes you're paying on an old ratio that isn't really relevant anymore um the appeal forms for 2024 will become available in mid January the appeal deadline for 2024 is March 31st so all of the appeals for this year have to be filed by that date um you can file an appeal online through the website um or you can file a physical form with the office of property assessments but um it's definitely worth taking a look at your property assessment again especially for people that were appealed by the school district in the past and did not do anything about it because your assessment is likely artificially high and there's probably some room for some savings for you and and let me add this listener if you're a property owner and you're trying to think for yourself whether or not you should file an appeal in 2024 or not uh what you should do is you should email Nicole uh her email address is Nicole@Pghfirm.com uh send her an email give her your address let her know what your purchase date and price were um and she'll do an initial assessment and get back to you if you think and but you're not sure that maybe 2024 is the right year for you to appeal your taxes may as well ask yeah and I people reach out to me all the time I don't even need any all I need is an address I do kind of the research on our end take a look at it um and that's what I do all day so always do that for free happy to give people information and uh thanks for giving them my email address yeah I'm happy to put that out there um it you know it's a professional email I I don't feel like I just doxed you no um but but but we can save that for later if you want me to give out your cell number no that's okay and I just like to end the interview with uh go bills let's go Buffalo yeah yeah yeah I mean the Steelers don't deserve to be in the playoff so uh given that go bills that's fine thank you I'll take it I'll accept that thank you for joining us on I strenuously object we want to try to save you money if we can or if you think we might uh please visit Flaherty Fardo's web page at PGH firm.com uh from there you can find information on the Allegheny county tax appeal process you can find contact information uh so that you can kind of submit uh your case your name your address for review by Nicole it's it's a chance to save some money and it doesn't cost you anything so you should do that otherwise what you should also do is subscribe rate and review the podcast uh if you have any questions uh about tax appeals or anything else for our mailing it in segment or any feedback for the Pod you can email the podcast at iobject@PGHfirm.com we are on Instagram @Istrenuouslyobjectpodcast and uh until next time some parting advice get a house with a 25e roof an indestructible box you put the rest into the system at 3 to 5% to pay your taxes and that's your base get me that's your Fortress of [ __ ] Solitude that puts you for the rest of your life at a level of

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