Pennsylvania

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State of Pennsylvania Property Taxes


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State Tax Summary
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No state agency is responsible for property tax assessment in Pennsylvania. The assessment process is under the jurisdiction of 67 county organizations. The assessments of 67 different offices are used by school districts, municipalities and counties to levy property taxes. The state of Pennsylvania names the real property tax a Property Tax and the official value standard states the Assessors must value the property “according to the actual value thereof and at such rates and prices for which the same would separately bona fide sell.” Actual value has been interpreted by the courts to mean market value. Market value “is the minimum amount of cash the property would sell for if offered for sale in the open market during the tax year. It also assumes that the buyer and the seller are well informed and under no undue compulsion to sell or buy.” Pennsylvania Statues, as amended. Pennsylvania does not impose a tax upon real property, except for a realty tax on public utilities under the Public Utility Realty Tax Act (72 P.S. article 8101-A). The real property tax system of Pennsylvania is highly decentralized, with numerous variations in due dates and procedures for the taxing authorities. The system follows five steps to determine property tax: classification, valuation, equalization, assessment, and levy of tax. Personal exemptions and tax relief programs vary for each county. The Pennsylvania Constitution (article VIII, section 2) mandates that residential real estate owners may be given tax relief for a totally disabled veteran and a disabled person: paraplegic, amputee, or blind. A rebate may be available for senior citizens, widows, widowers, and permanently disabled with incomes of less that $15,000 per year. How to Reduce Your Property Taxes (Adler, 1995). Property tax exemptions are given for government property, religious property, charitable property, educational property, hospitals, and cemeteries. The Philadelphia Area Service Center (ASC) provides tax service for Pennsylvania.

Contents

Responsible agency

Each county tax assessor office is responsible for property taxes and collection. Tax assessors are elected or appointed, and this varies by county. A high school education is required. All assessors must be certified by the State Board of Real Estate Appraisers and complete a 90 hour basic appraisal course.

Property tax calendar

Each county in Pennsylvania publishes a tax property calendar with dates, statute and responsibilities for every taxpayer and assessor. First Class county requires filling an appeal by the first Monday in October. Second Class county requires filling an appeal by last day of February. Second Class A & Third Class county requires filling an appeal by September 1. Fourth, Fifth, Sixth, Seventh and Eighth Class counties requires filling an appeal by September 1. Cities with Third Class county require filing an appeal within 30 days after notices are delivered to taxpayer.

  • Assessment date Varies in each county
  • Valuation Notice Date Varies in each county
  • Appeal Deadline

First Class county requires filing an appeal by the first Monday in October. Second Class county requires filing an appeal by last day of February. Second Class A & Third Class county requires filing an appeal by September 1. Fourth, Fifth, Sixth, Seventh and Eighth Class counties requires filing an appeal by September 1. Cities with Third Class county require filing an appeal within 30 days after notices are delivered to taxpayer.

  • Bill Payment Date

Every year county and municipal taxes are due: March 31, April 30, May 31. Every year school taxes are due: August 31 and September 30. Some municipal taxes are due earlier: February 10 through February 28. All counties have the same discount of 2% if taxes are paid in first 60 days from issue date. The penalty period begins four months after the issue date. Taxpayers must pay the taxes due in full to receive a 2% discount.

Property tax rates and dates

  • Annual assessment of real property Yes
  • Classification of property All assessed at 100% of taxable value.
  • Collections Taxes are collected one year in arrears
  • Fiscal year July 1 through June 30
  • Level of government responsible for assessment County
  • Reassessment cycle Every 6 years
  • Tax Calculation Rate

Mileage X Assess Value = Annual Tax Levy Assessed value is the full market appraisal value of real property multiplied by the local assessment ratio. The ratio is a percentage of the market value determined every year by the local government. By Pennsylvania law the ratio cannot exceed 100% for First Class through Third Class counties and 75% for Fourth Class through Eighth Class counties. First American Real Estate Tax Handbook, 2002 Edition, pg. 534.

Residential Exemptions

Exemption claims must be filed for a tax assistance or rental rebate program with the county assessor.

  • Longtime owner exemptions and deferrals

Philadelphia and Allegheny County may defer or exempt from real property taxes for longtime owner-occupants whose property taxes have increased due to an increase in the market value of their property as a consequence of renovation of other residential property in a long-established residential area or area of deteriorated, vacant or abandoned homes (72 P.S. article 4749.2; 72 P.S. article 4749.4) A long-time owner is someone who has owned the same dwelling for 10 continuous years.

  • Disability Exemption

For a taxpayer that is paralyzed in both legs; an amputee of both legs; with progressive neuromuscular of neurological disease; permanently lost the use of both arms or had undergone amputation of both arms may apply for exemption with certification from a qualified medical physician.

  • Disabled Veterans

For a service connected permanent disability of at least 60%, a veteran may file for exemption for up to $10,000 assessed value for a 100% disabled veterans. A disabled veteran’s benefit may continue after death; and the veteran’s widow may file to receive the benefits of this program. This exemption must be renewed annually. Occasionally, the state offers a 100% tax exemption to veterans, veteran’s widows, or property owners with unusual circumstances.

  • Property tax relief rebates for seniors and low income

Any taxpayer 62 years of age or older, whose household income for one year is $15,000 or less, may appeal for tax assistance or a rental rebate program. This program is for anyone meeting the age, residency, and income limits regardless of whether the taxpayer owns a home, rents or lives in a mobile home. Filing for the assistance and rebate is from January 15 to April 30 of each tax year. The amount is graduated, based on household income and tax or rents paid.

Commercial Exemptions

  • Agriculture Personal property exemption

Property used for agriculture operations and farm implements and forest reserve property are valued based upon the use and the value of that use to the current user (72 P.S. article 5490.3).

  • Conservation property

A taxpayer must file a declaration with the local county assessor to claim an exemption for a compensation under a soil conservation program for three years, and contains at least 10 acres or has anticipated annual gross income of $2,000. Forest reserve land consisting of 10 acres and agricultural reserve land of 0 acres devoted to noncommercial open space, used for recreation or scenic enjoyment open to the public, may enroll the property for special valuation. (72 P.S. article 5490.4b).

  • Enterprise zones

New and existing businesses may qualify for a city granted property tax exemption if they locate in economically distressed areas approved as an Enterprise Zone before 1994 and is exempt through the year 2004; or may qualify for exemption for 6 to 15 years. Qualified businesses may be subject to a specific tax. A local district may exempt all new personal property for an eligible business in a distressed area.

  • Pollution control property

A taxpayer must file a declaration to exempt property used exclusively for water or air pollution control.

  • Rehabilitation district

Local governments may grant abatements and establish obsolete property rehabilitation districts for up to 12 years for rehabilitated commercial property and commercial housing property located in rehabilitation districts. To qualify for tax abatements the commercial property must be used to manufacture and process good or materials, conduct high-technology activity, and create or synthesize bio diesel fuel.

Tax Collector and Officials

Local assessors and treasurers determine tax assessment and collect property taxes. All Assessors are elected to four-year terms or appointed, which varies by county. The county treasurer is the ex-officio collector in all counties. County Assessors maintain and set property valuations. The County Auditor certifies property valuations. The County Treasurer collects current and delinquent property tax.

Forms

Specific deduction claim forms are available for each county from the Property Assessment Division.

Forms due dates

Each county has form due dates. Applications for deductions against real property must be filed with an affidavit to the local tax collector in Pennsylvania by May 1 and must be filled again if the property changes owners. All deductions for real property require that the ownership must be recorded as of March 1 of the assessment year for taxes payable the following year.

State assessor's manual

No state assessor’s manual is available.

How property tax determined

Residential property is assessed at 100% of market value, if it is a First Class through Third Class county. Property is assessed at 75% of market value if it is a Fourth Class through Eighth Class county. The county assessor may use one of three methods.

  • Cost Approach

At current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.

  • Income Approach

For an apartment or office building, estimate how much income the property can produce.

  • Market Approach

Use other comparable properties that have sold recently, determine the most probable sales price of the subject property.

Appeal Procedure

  • First

Try to resolve the problem in an informal meeting with the local county assessor, after receiving the valuation notice in the mail.

  • Second

Next, if not satisfied with the informal meeting, file a formal written appeal to the County Board of Assessment Appeals.

  • Third

If not satisfied, a taxpayer may appeal to the County Court of Common Pleas.

  • Fourth

If not satisfied with the County Court of Common Pleas, then appeal to the Commonwealth Court.

  • Fifth

If not satisfied, appeal to the State Supreme Court. All administrative appeals must be exhausted before making any judicial reviews. All current taxes must be paid in protest before the state or courts will hear your case.

Additional tax classifications

  • Public Utility Realty Tax

Pennsylvania does not impose a tax upon real property, except for a realty tax on public utilities under the Public Utility Realty Tax Act (72 P.S. article 8101-A).

  • Personal property tax

Tangible personal property is not taxable in Pennsylvania. A personal property tax is imposed on certain classes of intangible personal property, unless exempt (72 P.S article 4821).

Additional tax bills and charges

  • Corrected bill

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the corrections are made. Corrected bills are also issued when levy rates are wrong, the house is on the wrong tax lot and for homeowner exemption.

  • Delinquent taxes

Delinquent balances are applied to subsequent bills. No notices are sent for delinquent taxes in Pennsylvania.

  • Penalty and Interest charges

Interest is charged at 10% if taxes are not paid in 120 days of issue date. An additional ¾% interest each month is charged for each month, or part of a month, on all taxes past due. When a property has a tax lien, additional fees will be included with the delinquent taxes.

  • Special purpose tax rates

Pennsylvania law allows for special purpose tax rates in addition to property tax to be included in tax levies for the purpose of funding various government services, facilities, and improvements. These special purpose taxes may be for debt service, parks and playgrounds, capital reserve fund and Community Colleges.

  • Supplemental bills

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a corrected bill is issued when the corrections are made oromissionss are found. Supplemental bills are sent to property owner from the county assessor’s office and the bills are due in 30 days.

Current Legislation and Pending Issues

References





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