The Law Forum – Real Estate Assessment Tax Appeal

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The Law Forum – Real Estate Assessment Tax Appeal

In 2012, Lebanon County undertook a county-wide reassessment of all real estate property values for the purpose of recalculating real estate property taxes.

While many property owners chose to file an appeal of their new tax reassessment, many others did not file an appeal.

Fortunately, every property owner has the right to challenge their assessment at any time. Therefore, if you thought you missed the opportunity to file an appeal, you are incorrect.

However, before you decide to file an appeal, you should evaluate whether you have a reasonable chance of success.

Most owners of real estate receive two yearly real estate tax bills. The first is typically a combined bill for both the county and local municipality real estate taxes. The second is for the school tax.

On each of these tax bills, there is a reference to the “assessed value” or “assessment” of your real estate. By itself, this assessed value is a relatively meaningless number. Rather, your real estate taxes are a mathematic product of this assessed value. Therefore, if your assessed value is incorrect, your taxes will be incorrect.

In order to determine whether your assessed value is correct, you must multiply the assessed value by the number which the tax authorities refer to as the common level ratio. In Lebanon County, the common level ratio is currently .94. If your taxes are calculated correctly, the resulting number will closely approximate the fair market value of your real estate.

For example, an assessed value of $100,000, when multiplied by the .94 common level ratio, indicates that the tax authorities consider your real estate to have a fair market value of approximately $94,000.

So, what exactly is the fair market value of your property? By definition, the fair market value is the maximum sale price which your property can reasonably achieve if placed on the open market for a period of six months.

If you decide to file an appeal, you must present proof of its fair market value. The best proof is a real estate appraisal from a local, licensed, real estate appraiser.

Many people choose to rely upon a realtor’s market analysis to support their belief as to the fair market value of their property. However, realtors are not licensed real estate appraisers. Therefore, a realtor’s market analysis may not carry significant weight when presented in court.

Procedurally, if you appeal your tax assessment, a hearing will be held before the Board of Assessment Appeals, which is comprised of our Lebanon County Commissioners.

If the Board of Assessment Appeals renders a decision which you believe to be incorrect, you have a further right of appeal to the county Court of Common Pleas.

For those individuals who own real estate which is not located in Lebanon County, it should be noted that each county uses its own common level ratio. For example, Lancaster County uses a multiplier of 1.29, Berks County 1.32, and Dauphin County 1.34. As such, the Lebanon County multiplier applies only to Lebanon County real estate.

The multiplier for other counties can be determined by contacting any county tax assessment office. Furthermore, this multiplier is recalculated each year, with the new multiplier taking effect on the first of each July.

Keep in mind that if your property is mortgaged through a bank, your real estate taxes are possibly being paid as an add on to your monthly mortgage payment. Therefore, if successful, a tax assessment appeal may effectively lower your monthly mortgage payment.

Lastly, if the difference between your total assessed value and the property’s actual fair market value is significant, some attorneys will handle your tax appeal on a percentage of tax- savings basis. Therefore, you may be able to secure representation on this type of matter without incurring significant attorney fees.

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