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The Property Assessment Appeals Process

The importance of the property assessment appeals process often goes overlooked by homeowners, and especially by owners of newly constructed homes. Owners of new homes have seen their property assessments lowered by thousands of dollars through the assessment appeals process. It is important to note that the assessed value of a property often does not mirror the true market value.

The appeals process is usually straight forward, and involves a home owner providing the county tax appeals board with recent market data (neighborhood home sales, appraisals, etc.) regarding their home's value. Based upon a short hearing and the documentation provided by the property owner, the board will determine a fair market value for the property. The board then applies the appropriate Common Level Ratio (CLR) to the fair market value to arrive at the new assessed value.

What is a Common Level Ratio?

The Common Level Ratio (CLR) is a formula used in Pennsylvania that reflects a statistical computation of the average sales price versus the assessed value.¹ It is designed to protect individuals who appeal their property tax. When you appeal your property tax, you are in effect asking your taxing authority (the county) to assign a market value to your house based on the evidence you submit. The value that the board assigns is 100% of what they think your house is worth. This value generally does not reflect the current assessed value of other homes in the area, because the county's assessment process usually lags the market by several years or more. The CLR is an attempt to take this disparity into account and "equalize" the taxes of those who appeal so that they pay at the same effective rate as the rest of the county.

Example: Property owner A appeals his assessment, and the county's tax appeals board assigns a value of $200,000 to his home. The appeals board then applies the CLR to that market value and comes up with an assessed value of $109,800. That becomes the basis for taxes at all three levels of taxation -- county, municipality, and school district. For example, in Chester County, the underlying premise of the CLR is to equalize homes assessed initially in 1998 (or whenever reassessment occurred) and those built and assessed today.

It is a property owner's right to appeal their assessment. There are two basic types of appeals: 1) Annual appeals, which are available to all property owners; and 2) interim appeals for new construction or additions that increase the property's value.

For more information about appealing a property's assessment, please contact your county's tax assessment office. For more information on the State Tax Equalization Board, visit www.steb.state.pa.us. This site includes a history of the CLR for each county in Pennsylvania.

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¹ The CLR is posted on July 1. For more information on the Common Level Ratio go to http://www.steb.state.pa.us.

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