In an unprecedented move, Pennsylvania’s State Tax Equalization Board (STEB) released a revised equalization ratio for tax year 2022 for Allegheny County. This decision was meant as a correction for 2022 valuations, as noted in the presiding judge’s own language that Allegheny County had “cooked the books” for 2022 to curb the ever-increasing equalized market values in the recent case of Gioffre v. Fitzgerald et al., GD 21 007154.
Pennsylvania law does not mandate scheduled reassessment. Rather, each year STEB calculates an equalization ratio for each individual county utilizing property sales information provided by each county. This information is used to establish a common level ratio (CLR). The CLR is applied to the base year assessment to arrive at an equalized market value. Taxpayers must file an appeal and prove a lower equalized market value to reduce their assessments.
The revised 2022 ratio was issued from this case at the direct order of the Pennsylvania Commonwealth Court. Absent an appeal by the taxing bodies, this concludes over a year’s worth of litigation and lowers the equalization ratio from 81.1% to 63.5%. The 2024 equalization ratio of 54.5% was issued through STEB’s normal course of business and marks another sizable drop in the county’s assessment calculations. This drop creates significant tax reduction opportunities. Further, new litigation regarding tax year 2023 may reduce the current 63.6% ratio as well.
These retroactive ratio revisions are impacting billions of dollars in property tax assessments throughout the greater Pittsburgh metropolitan area. This significant decline in equalization ratio, or CLR, creates a unique opportunity for an assessment appeal. As the CLR goes down, the likelihood of overassessment goes up. The deadline to appeal 2022 has passed; however, the local governing body approved legislation that will establish a second window to appeal 2023, should the ratio drop. The 2024 assessments can be challenged as early as January 1, 2024, with a final appeal deadline of March 31, 2024.
Any property owner with assets in Allegheny County should immediately consult a Ryan expert to compare the true fair market value with the current assessment. The local property tax experts in Ryan’s King of Prussia, Philadelphia, and Pittsburgh offices represent property owners proactively, using multiple tax mitigation strategies designed to address reassessments and future liabilities.
TECHNICAL INFORMATION CONTACTS:
Michael Allen
Principal
Ryan
954.740.6240
michael.allen@ryan.com
Kurt Lieberman
Principal
Ryan
215.405.0410
kurt.lieberman@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.
- Sujet
- Michael Allen
- Kurt Lieberman