In Pennsylvania, there are generally three (3) forms of real estate taxation: (1) County; (2) Municipality (i.e., Township, Borough or City); and (3) School District. Each of these taxing authorities sets their own taxing rate, referred to a millage. A mill is equal to $1.00 for every $1,000.00 of assessed property values. The total real estate tax that someone pays is equal to the total millage of all the taxing authorities times the assessed value of the real estate.
The calculation of the assessed value is not a simple matter. The assessed value is equal to the ratio between fair market value and assessed values within a county referred to as the common level ratio. The counties use a base year when all properties were last assessed to arrive at their assessed values. In Bucks County the last countywide reassessment was done in 1972. The common level ratio is a statistical calculation performed on a yearly basis by the State Tax Equalization Board based on data of sales in the prior year.
A taxpayer has the right to challenge the assessment of his/her real property on an annual basis. If you are successful in reducing the assessment of your real property you will have effectively reduced all of your real estate taxes. Each county has a cut off date to file a challenge for the taxing authorities next fiscal year. In many counties the deadline is August 1st, however it is important to know the cut off for the county in which your property is located. The appeal it initially heard before the county’s Tax Assessment Appeals Board. At the hearing before the board, the taxpayer has the burden of proving that the property is over assessed. Normally, a taxpayer must prove that the property is over assessed in comparison to comparable properties within its taxing area (If you recently purchased your property you may be able to introduce your HUD-1 Settlement sheet as evidence that the property is over assessed). A taxpayer may also be able to challenge the assessment based on other theories (e.g. illegal spot assessments or constitutionality of the county’s base year), but are beyond the scope of this posting. A taxpayer also has a right to appeal a reassessment done to the property due to a substantial change within forty (40) days of receipt of the notice of reassessment from the county. The taxpayer or any taxing authority has the right to appeal the Tax Assessment Appeals Board’s decision to the Court of Common Pleas of that county, within a certain period usually thirty (30) days. The Court of Common Pleas does not consider the board’s decision so long as independent credible evidence is introduced at the hearing before the court. During the pendency of the appeal the taxpayer is still required to pay all taxes when they are levied.