UNDERSTANDING YOUR PROPERTY TAXES. Presentation to Meadville City Council February 20, 2019

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1 UNDERSTANDING YOUR PROPERTY TAXES Presentation to Meadville City Council February 20, 2019

2 This is your home 2

3 Your view of your home 3

4 A buyer s view 4

5 A lender s view 5

6 An appraiser s view 6

7 A tax assessor s view of your home 7

8 1. Let s clear up some misconceptions 8

9 City taxes did NOT pay for a Judicial Center. Your City taxes did NOT build the Walnut St. parking structure. The City did NOT spend millions to renovate a school, and then close it.. 9

10 Real estate taxes in the City of Meadville: School tax levy County tax levy City tax levy Total tax millage mills mills mills mills 10

11 Meadville s property tax base Taxable property assessed value $155,719,470 Total assessed value $279,018,415 Tax exempt, 44% 56% pays 100% of property tax 11

12 The City is responsible for only 22.7% of your property taxes. 22.7% School taxes 54.6% 22.7% 12.7% 10% County taxes City taxpayer share Tax exempt's share paid by taxpayers 12

13 Every dollar of City property taxes helps to pay for services which benefit every: Resident Visitor Business & Charitable Institution Every day, twenty-four hours a day. 13

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16 Calculating your property tax bill Average assessed value of property in the City is $25,000 One Mill of Tax = $1 of tax per $1,000 of Assessed Valuation mills X $25,000 1,000 = $548 City Tax mills X $25,000 1,000 = $ County Tax mills X $25,000 1,000 = $ School Tax 16

17 Important! The assessed value of your property is NOT EQUAL to its market value. The assessed value should be a fraction of the property s current market value. 17

18 The last true assessment in Crawford County took place about 50 years ago! Many factors influencing property values have changed since then 18

19 Note: The present assessed value of your property was derived by means of a mathematical manipulation back in The assessed value is theoretically 75% of the market value of the property in Ideally, every county in Pennsylvania should re-assess properties every ten years. No county does that, however. 19

20 Relating 1985 assessed values to a 2019 world: Common Level Multiplier Developed by the State Tax Equalization Board 1985 assessment x multiplier = current base Ex. $25,000 x 2.61 = $65,250 current base 20

21 This calculation is only a guideline. It is NOT a definitive statement of value. It is based on two assumptions: the 1985 assessment was accurate all properties appreciate at the same rate Because real estate varies so widely in location, construction quality, and condition, gauging current market values should not be trusted to averages. Common Level Multipliers

22 Should the City conduct its own reassessment? Cost $500,000 to $750,000 Does not fund services for tax exempt properties A city reassessment doesn t address disparities in assessment compared to other municipalities. City assessments tend to be high Non-City assessments tend to be low 22

23 Should you appeal a property assessment? Case #1 Your property is assessed at $25,000 $25,000 x 2.61 = $65,250 indicated base The current appraised value is $75,000. Be happy! You are paying less tax than you might expect. 23

24 Should you appeal a property assessment? Case #2 Your property is assessed at $25,000 $25,000 x 2.61= $65,250 Annual taxes are $ The current appraised value is $45,000 45, = $17,241 theoretical reassessment [(Actual assessment minus correct assessment) times total tax millage] 1,000 = amount being overpaid in taxes Example: [($25,000 - $17,241) x 96.38] 1,000 = $ You are overpaying $ in taxes each year. In this case, an assessment appeal would be warranted. 24

25 Filing a property tax appeal New Common Level Multiplier will be published July assessment x Multiplier = current base Current base less than current market? An appeal is unlikely to be productive Current market value less than current base? An appeal may be warranted Reminder: [(Actual assessment minus correct assessment) times total tax millage] 1,000=amount being overpaid in taxes 25

26 Filing a property tax appeal - continued Property tax assessment appeal filed in August Assessment Office notifies you of hearing date Provide multiple copies of a current appraisal (less than six months old) to County at least 10 days before hearing Attend hearing and state your case to the Appeals Board. If a reduction in assessed value is granted, that reduction will take effect the following year. 26

27 Wrapping it up 77.3% of your property taxes are controlled by the School District and the County. Your City property taxes could be 44% lower if the state legislature would develop a funding mechanism for all municipalities hosting tax exempt properties. Your City property taxes help to fund 24/7/365 fire and police protection, along with streets department services. A city-only reassessment would not correct county-wide or school district-wide assessment inequalities. If there is a substantive error in your favor, you can have it corrected with a corresponding reduction in taxes. Filing an individual tax appeal, if warranted, is more effective than a City-only reassessment. 27

28 Calculating your tax: One Mill of Tax = $1 of tax per $1,000 of Assessed Valuation (Assessed Value x Millage) 1,000 = Property Tax Relating Assessed Value to Current Base: 1985 Assessed Value x Current Common Level Multiplier = Current Base Is an Assessment Appeal Warranted?: Compare current base value with appraised value exceeds appraised value use two formulas: If current base Appraised value CLM = theoretically correct reassessment [(Actual assessment theoretical reassessment x millage] 1,000 = amount overpaid in taxes 28