Ad Valorem Property Taxes, (i.e. taxes based upon property values), pay for many useful and important things in our communities: public schools, community colleges, local government employees, police and fire protection, roads, and more. Although they can be a pain, it is clear that they serve a purpose. But what happens when a county has not undergone a county-wide reassessment in a while?
Under Pennsylvania law, real estate taxes must be uniformly (i.e. fairly) assessed across both commercial and residential properties. In March 2017, following a trial brought by two taxpayers challenging the county’s alleged lack of uniformity, the county was ordered by the Delaware County Court of Common Pleas to conduct a property tax reassessment, which will be effective for the 2021 tax year.
The last county-wide reassessment was effective January, 2000, with the base year for assessment calculation purposes being 1998. Although discrepancies in assessment at the school district and municipal levels tend to be less discernable, at the county level, they become acute and the inequalities in uniformity become readily apparent. Over long periods of time, many factors impact assessment uniformity despite the use of an annual Common Level Ratio issued by the State, which is intended to help maintain uniformity in assessments. Some of these factors include:
- Increases in construction costs
- Trends in the market
- Improvements to buildings
- Utilization of the appeals process.
The issue with uniformity is that the determination of property values is not simply objective, but is as much an art as well. For example, in a block of five adjoining row homes, often times the center row home is assessed at slightly less than the homes on either side of it, despite the fact that they all share adjoining walls on both sides.
To facilitate the reassessment process, the county hired Tyler Technologies Inc. (Tyler), and in December 2017 Tyler began its valuation of the county’s 200,000 property units. Tyler will conduct street and aerial photos of every property for purposes of arriving at a value conclusion for all 200,000 units. In early 2020, property owners will receive written notice of their new tentative value. Each property owner will then be given an opportunity for an informal meeting with Tyler to discuss his or her property’s value prior to issuance of the new assessment by the county. Depending upon the type of property, market values will be calculated by one of the following methods:
- Sales Comparisons (Market Analysis)
- Cost Analysis (Cost to Construct)
- Income Approach (Reserved for income-producing properties)
With the expectation of these new reassessments comes trepidation as to the effect that they may have on taxes. Contrary to popular belief, the reassessment overall will not cause a significant increase to property taxes. Instead, the process is a reallocation of the tax burden to ensure that everyone is paying fairly. This does not however mean that those whose property has been over-assessed will not see a decrease in their assessment, and that those whose property has been under-assessed will not see an increase in their assessment. Despite these changes, the reassessment should not result in more revenue for tax authorities. Rather, each tax authority by law must reduce its millage rates (a value used to calculate local property taxes) resulting in a zero net sum for the tax authorities in the first year of the reassessment.
Overall, the Delaware County tax reassessment should have no real worrisome ramifications for property owners, the exception being those whose property is under assessed. But on a macro-level the reassessment should help to make a larger impact on the uniformity of the county and the equity with which taxes are allocated among the county’s 200,000 property units.
Should you have any questions about the Delaware County tax reassessment project, you can contact the Delaware County Treasurer’s Office at 610-891-4879.
