The property tax is used as a revenue source by county government, 14 school districts and most of the 73 municipalities in Chester County. It is the responsibility of the County Assessment Office to place a value on each parcel of land and any improvements (structures) thereon. Assessments are derived by assessors who are state certified under Pennsylvania law.
New Construction Assessment
The county assesses the value of a home when it is built. They send an inspector to all new construction properties to determine the assessed value of the property. The homeowner gets the first Tax bill (called the Interim bill) a few months after Settlement. As all my new construction clients know, you definitely want to appeal the tax assessment when you get this bill, because new construction is always assessed too high. The letter you get from the county has the info on how to make the interim appeal, but you can also get more info here. http://www.chesco.org/255/Assessment-Appeals. Remember there is a time limit to making this appeal - and your letter will state what it is.
Resale Homes Appeal
You don't just appeal taxes for new construction homes. In a recessive market, when home values have fallen, it definitely makes sense to appeal the assessment, in order to lower the tax bill. The process is very similar - go to http://www.chesco.org/255/Assessment-Appeals which answers a lot of frequently asked Questions. The time frame to appeal in Chester county is May-July, they will not accept the appeals throughout the rest of the year.
The form is pretty easy to fill, you can download from the website. There is a $25 fee, and you are required to give 3 comparable sales or a recent appraisal. The form asks what you think the current Market value of your home is. It does not have to be your purchase price. Call or email me, and I will be able to provide you with 3 comparable properties required for the appeal. No need to pay for an appraisal. Of course you only want to appeal taxes if your appeal is likely to lower your taxes. If property market values have risen, you do not want to bring that to the attention of county officials.
Relation between Assessed value and Market value
How do you know if your property assessment is too high? The county decides on a Common Level ratio (CLR) which determines the relationship between the Market value and Assessed value of a property. Currently, in March 2017, the Chester county CLR is 53.8%. Which simply means that if the assessed value of your property (building and land) is $100k, its fair market value is about $186k. (100,000/53.8%) Once you know the fair market value, it is easy to calculate the assessed value and vice versa. All taxes are a % of the Assessed value, the Chester county millage rates are available here, so it is easy to determine if you are paying too much tax relative to your neighbors, simply do the math.
Hope that was helpful. Look out for my next blog article regarding the savings thru the Homestead Tax relief.
Always making a difference...