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8A — April 24 - May 14, 2015 — Spring Preview — M id A tlantic
Real Estate Journal
P roperty T ax By Jeremy D. Frey, Barley Snyder Property tax assessments: Should you appeal?
W hile a recovery is underway for the commercial real es-
expense through tax appeals. In Pennsylvania, property owners can appeal their taxes every year, often at little to no net cost, and perhaps signifi- cantly reduce their tax burden. In Pennsylvania, a prop- erty’s tax assessment forms the basis for all of the real estate taxes. The assessment is established by the County once every few years and remains fixed as property values move up and down. If the assessment is too high, the taxes are too high as well. The assessment will remain the same until the property is
changed (improvements are added or removed), the County undergoes a County wide reas- sessment, or an appeal is filed so if the taxes are too high, it can add up quick. County wide reassessments do not occur often. If you lower your as- sessment, you will lower your real estate taxes until the next County wide reassessment occurs which could be many years. Reducing your assess- ment can make your project more competitive in the mar- ketplace if your competition is assessed above market value. The amount of costs involved
in the appeal are often far less than the total savings you will receive if the appeal is success- ful. In most cases, the only costs are an appraisal of the property and legal fees. So how do you challenge your tax assessment? The process is started by filing an appeal to the County Board of Assessment Appeals. The Board will review the assess- ment and determine if it is too high. For a successful appeal, you will typically need a recent appraisal of the property. If the Board’s decision is not satisfactory, an appeal can be
filed with the Court of Com- mon Pleas. Keep in mind that any re- duction in the assessment will most likely result in tax savings not just in the year in question but in future years as well. While in general you can- not receive a refund for past taxes paid if your assessment is too high, your assessment will be reduced for future years which will save you money. To determine how much savings you could receive, determine your local millage rates and multiply those by the differ- ence between the current as- sessment and what you believe the assessment should be and you can determine the savings for one year. For example, if the combined millage rates in your municipality (School, County and Municipal millage rates) are 25 mills (or 2.5%), you would save $250 for every $10,000 that you reduce your assessment. If you believe your assess- ment is too high you should touch base with an attor- ney who can help lower your assessment and lower your taxes. Jeremy D. Frey is a part- ner at Barley Snyder. He focuses his practice in the areas of planning, negotia- tion and execution of busi- ness and real estate trans- actions, real estate develop- ment, land use and zoning matters, real estate assess- ment appeals, business and real estate financing, and business planning. n a section of the MARE Journal P.O. Box 26, Accord, MA 02018 781-871-5298 • 800-584-1062 fax 781-871-5299 www.marejournal.com Publisher/CEO Linda Christman lchristman@marejournal.com Section Publishers Alissa Aronson araonson@marejournal.com Spring Preview
tate market, everyone is still looking for ways to cut expenses. Real estate t axe s r ep - resent one of the most s i gni f i cant
expenses of commercial real estate and while many own- ers and developers consider them a fixed expense, there is often opportunity to lower that Jeremy Frey
We know Real Estate Our dedicated real estate attorneys provide comprehensive legal services to assist clients in every stage of the real estate transaction. We regularly represent developers, businesses, public entities and individuals. Listed as a 2015 Harrisburg Tier 1 firm in five practice areas, and Tier 2 firm in two practice areas.
• Negotiation • Due diligence • Permits & Approvals • Title insurance • Entity formation • Settlement • Tax assessment appeals
Barbara Holyoke bholyoke@marejournal.com Section Editor Julie King editor@marejournal.com
Lancaster York Reading Hanover Malvern Hunt Valley www.barley.com @barleysnyder
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