Bucks County Raises Taxes

December 22, 2011:  In an article posted today on the www.phillyburbs.com  website, Staff Writer, Gary Weckselblatt, writes about the decision of the Bucks County Commissioners to increase taxes by 5.7%.  In return, the county plans to spend slightly less in the new year than it did in 2010.

The increase is the first in six years.  The county spending plan of $461.8 million will be funded by upping the county millage rate to 1.258.  Also, implemented will be a hiring freeze and potential staff reductions.

While the increase is not as drastic as those implemented in neighboring counties, it will cause some residents to seek relief.  Given that property values in Bucks County are stable at best (declining in some areas), many property owners will likely turn to appealing their property tax assessments as a way to stave off the increases and, perhaps, lower their tax burden.

The Up Side…this is a good time for property owners to explore assessment reduction.  Reducing your assessment will effectively reduce your tax burden. 

When appealing your assessment it is imperative to have the best sales data available, to support your case.  Having an appraisal of your property completed by a State Certified Real Estate Appraiser to submit with your appeal will give property owners the best chances of winning a reduction. 

Property owners may also want to hire a tax assessment reduction firm to represent their appeal.  There are many firms that specialize in assessment appeals as well as a number of attorneys that make it part of their overall practice.  Typically, they will take care of filing the appeal and will represent you at the hearing.  They will usually work on a contingency basis, meaning they will not receive a fee unless you get a reduction.  Their fees are usually a percentage of the reduction.  When looking for someone to represent you, be sure that they have experience with tax appeals and that they have a proven record of success in front of your particular Board of Assessment.  All the Boards are different and knowing that your representative has had success in front of your Board will only make your case stronger.

To read the full article, visit the following link.  Bucks Spends Less, You Pay More

If you have any questions about tax assessment appeal or property value , please feel free to call or email The Coyle Group at 215.836.5500 or appraisals@coyleappraisals.com 


Potential 32% Reduction!

A property owner in Whitpain Township contacted our office about doing an appraisal of his property for tax assessment appeal.  As we do with all of our assessment appeal clients, we ran the public records on the property and searched for any prior MLS data on the house.  This gives us a preliminary understanding of the property.

In this case, the house was a 5 year old 1 story rancher.  Not very common in this particular market where 2 story colonials are the norm.  The public records indicated that the house was over 5,100 square feet…large for a rancher.  Digging a little deeper we found that 2,000 square feet of the listed gross living area (GLA) was contained in the finished basement. 

Why does that matter you may ask?  Well, from an appraisal perspective, below grade living space is generally not valued the same as above grade living space; nor, is below grade living space included in the overall GLA calculations.  So, again from an appraisal perspective, the actual above grade GLA for the property is really about 3,100SF with 2,000 of finished basement. 

This matters when an appraiser is reporting the Fair Market Value (FMV) of a property.  FMV is the basis for a property’s assessment. 

 While an assessor, for the purpose of assessment, may value below grade living space the same as above grade space, an appraiser does not.  The reason being is that when appraising for FMV the appraiser takes into consideration the actions, preferences and trends within a given market.  In this case, Buyers within this market will generally not value below grade living space (no matter how nice) the same way they would value above grade living space.   For example, Buyers might be willing to pay $125 per square foot for above grade space but only $50 per square foot for finished basement space. 

The property we were looking at had an Assessed Market Value of $889,300.  They were being taxed as if their home was worth $889,300!  Their annual taxes were in excess of $14,000.  That’s a lot for a modest rancher.

Our initial search of recent sales showed no sales of 1 story ranchers in the prior 12 and 24 month periods.  So, we expanded our search to include any and all sales within the subject’s municipality and school district.  What we found was that the average sale in the prior 12 months of all homes in this area was right around $600,000.  Keep in mind that these sales are all 2 story colonials, some much larger than our rancher.   Without having done an appraisal of the property and only using broad averages of the market we were able to present the following scenario to the property owner. 

If the property were to appraise at the market average of $600,000 and this amount was agreed to at the assessment hearing, the homeowner could potentially reduce their assessment by 32.5%.  They would save approximately $4,550 per year in taxes!   Keep in mind that the average is based on available 2 story colonial sales.  Chances are that the actual appraised value of the rancher may be less than the average resulting in a deeper assessment reduction.

So as tax appeal season approaches property owners should take a good look at their assessments and the public data available on their property.  They should check for errors in the public records, especially incorrect square footage, room count and exterior features such as pools.  These are often incorrect in the public records and, if left unchecked, could greatly affect your assessment and tax burden. 

Real estate agents and other professionals that work with property owners, now is a great opportunity for you to offer a value added service to your past, present and potential clients.  Offer to conduct a review of their assessment card and public records.  If you notice something out of the ordinary you can bring this to their attention and instruct them on how to proceed.

If anyone has any questions about their assessments or how to proceed with a tax assessment appeal, please feel free to contact our office at 215.836.5500 or email appraisals@coyleappraisals.com .