Are you thinking about selling your house? Now is the time.
Are you thinking about buying a house? Expect to pay more than you may have budgeted.
And when you put together a budget for the new house and living expenses, it would be a good idea to plan on an increase in your property taxes.
The housing boom in Western Pennsylvania has made this a lucrative seller’s market. Houses are selling in days, even hours. The inventory for available homes is quite low on the West Penn Multi-List, a source for real estate agents and appraisers covering a 17-county area. The listing commonly has 10,000 listings in an average month. During the first quarter of 2021, the listings were averaging a little over 3,000.
But these times are anything but average.
With residential properties selling for much more than their assessed value, taxing bodies (municipal, county, school district) are aggressively filing appeals to challenge those assessments. New home buyers are caught by surprise when they receive a notice in the mail, as much as a year after they purchased their home, that one of the taxing bodies has filed an appeal to raise their property’s assessed value and therefore raise the property taxes. In most cases, the appeal is filed by the school district since it has the most to gain and is seeking additional revenue.
The new homeowner is understandably upset as they could be facing a significant property tax increase, and they don’t understand why.
Assessed value is current market value
It is important to understand that the assessed value of property is based on its current market value.
For example, a house may have sold for $180,000 in 2015 and the listed assessment for the property in the county records is $180,000. The house recently sold for $300,000 and the owners were stunned to receive a notice the school district was filing an appeal. Do the math. Their property taxes are going up.
The school district’s case is simple. The homeowner paid $300,000 for the property eight months ago and may have paid more than the listing price. The school district will claim the selling price is the current market value. That’s strong evidence. But it’s not the last word.
We have been receiving calls at Steidl & Steinberg about these situations. While taxing bodies can present compelling evidence for the current market value by submitting the HUD-1 sales agreement, it is always worth taking a look at your situation to see if you have a case for a lower current market/assessment value. Contact us for a free consultation and case evaluation to help you chart your response. Let us help you determine your fair amount for property taxes.