School Me on the Property Tax Assessment Appeal

Submitted by 3RudySquared t3_10p3vnk in pittsburgh

In June 2022, we moved into a Penn Hills house after having been apartment dwellers for most of our lives. As such, news about property issues in the Pittsburgh area routinely passed by without our taking much notice.

Today, we received in the mail a copy of the 2023 Assessment Appeal relevant to our property, indicating that no action need be taken but that we've the right to attend an upcoming hearing of some kind. Our attempts to read backward through newspaper articles and this subreddit in order to figure out what has happened up to this point and what might happen in future was in vain, as the story is more than a little convoluted, especially to neophytes.

Can someone please give us a preçis of the issue or point us toward an outline/timeline of events so that we can more fully understand what this is all about and how, if at all, further vicissitudes might impact us?

Edit: As I may have mentioned, we need a summary of the issue—not piecemeal (and seemingly contradictory) advice, not lamentations about political corruption and certainly not a slew of negativity and misunderstanding.

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ktxhopem3276 t1_j6i4pp6 wrote

The last time there was a county wide reassessment was 2012. When you buy a house, it can trigger a new reassessment. It is informally called a “newcomers tax” The new value is usually a lot higher than your neighbors who haven’t moved since 2012 because the math they use is questionable and the subject of ongoing lawsuits. If you bought a house that has a lot of updates, they will try to use the sale price to justify a lofty assessment value. You should look into how to argue for a lower assessment using facts and data.

https://www.pghfirm.com/blog/secrets-to-winning-your-allegheny-county-tax-appeal

https://www.reedsmith.com/en/perspectives/2022/11/allegheny-county-in-legal-limbo

https://www.publicsource.org/allegheny-county-property-tax-appeal-assessment-lawsuit-unbalanced/

https://www.wesa.fm/politics-government/2023-01-25/county-council-gives-some-taxpayers-second-shot-at-challenging-property-assessments

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Cutter70 t1_j6je8lk wrote

I have seen and heard about new assessments happening after a purchase when the purchase price was a certain value over existing assessment. I had heard the flag was $60-70k higher and has no bearing on whether there were improvements or not. Might matter on neighborhood too.

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ktxhopem3276 t1_j6jflk5 wrote

The threshold for appeal is dependent on the locality. By improvements, I don’t mean additions or major modifications, I just mean the sale price was a lot higher than buying a fixer upper so more likely to get flagged.

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burritoace t1_j6kof5d wrote

The assessment is supposed to be based on changes in value since 2012, it's not intended to pretend time stopped a decade ago.

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ktxhopem3276 t1_j6kponm wrote

Yes the math gets fuzzy how much to attribute to inflation 63% or 81% and that’s what the lawsuit is over

Edit another way is 2.1% versus 4.7% compound annual growth rate

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burritoace t1_j6kq6ma wrote

I think people assume that improvements etc should not count towards their reassessment but they absolutely should

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ktxhopem3276 t1_j6kqd1q wrote

if the common level ratio is artificially low that will exaggerate the value of improvements and minimize the effect of inflation. And if you make improvement s and don’t sell your house you get an advantage over people who make improvements but do sell

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burritoace t1_j6kvzng wrote

Right, which is why I question the motives of the people seeking to adjust the ratio way down

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ktxhopem3276 t1_j6kw7i9 wrote

Do you think the 2.1% or 4.7% growth rate is correct?

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burritoace t1_j6kyhqm wrote

I think it varies too much to set one number for the whole county, so the current system is stupid and should be replaced.

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ktxhopem3276 t1_j6kzo6f wrote

Reassessing every 3-5 years would be a good middle ground. ten years is the absolute limit based on the current frequency of posts on Reddit. Every one or two years is a lot of effort for little benefit.

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suzibanarchy t1_j6im2yn wrote

When you purchase a home the sale price can trigger an appeal by either the school district or municipality because it may be more than you were previously assessed at. There are real estate attorneys that may be able to represent you at your hearing. I believe Real Estate Tax Consultants on Boyce Plaza Road is one.

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Herc5598 t1_j6jk7iv wrote

Yes they are. He helped me out a lot!! Good guy!

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BeefyHoagie t1_j6ida1c wrote

You can hire a lawyer if you want. It costs something like $900 in the end (I think the initial fee was $750 and then to appeal the decision was another $150). My lawyer is saying he’s getting my assessed value down a good bit, though I’m not 100% sure what would have happened if we would have just done nothing. It’s likely though if you own the house for 5+ years that appealing with a lawyer will work out financially for you.

Our process started around January 2021 and just now we have our final hearing in February 2023 so it takes a long time for the process to play out.

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BasicLook4336 t1_j6ii52e wrote

Something to be aware of. Once you get reassessed you will have to pay the back taxes from the date you closed on your property. If you have an escrow account, they may or may not raise your mortgage payment to allow for the increase in taxes, which can lead to a pretty big deficit. Our mortgage company allowed us too go 4000 dollars in the whole before increasing it. So now we are paying that back on top of our mortgage. Welcome to home ownership.

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tesla3by3 t1_j6ijicp wrote

I'm pretty sure the back taxes will be owed only for the tax year they appealed and all subsequent years, which may be different than the closing date.

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Monsters0n t1_j6jsxjo wrote

Yea this is what happened to us as well. Mortgage payments went from $1240 a month to $2100

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ScotiaMinotia t1_j6jq00c wrote

It’s a complete and utter scam is what it is. Pittsburgh won’t grow in any meaningful way with xenophobic tax tricks like this.

Talk to 2 - 3 real estate lawyers and pick the one you trust the most. It’s not super expensive Abdul will save you time and stress in the long run.

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cproco17 t1_j6k5hq8 wrote

It’s not just happening in Pittsburgh. It’s all of Allegheny County.

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PGHRealEstateLawyer t1_j6jkjor wrote

This is my primary area of practice. Feel free to contact me directly and I’ll be able to guide you through what’s going on.

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jisa t1_j6l5ceb wrote

Can I ask a more general question? My impression was that there is, or was, a lawsuit challenging the tax assessment scheme as violating the uniformity clause of the PA Constitution--that taxing newcomers differently than the general neighborhood was unconstitutional... Is that still pending, or what was the result if not?

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PGHRealEstateLawyer t1_j6l5teg wrote

That issue has been brought up many times before. The courts have repeatedly held that the school can appeal just like a taxpayer can.

If the county would have changed the assessment on their own without the appeal, that would be unconstitutional.

I recall someone brought that issue up again recently (last year or so). I don’t know it’s status, but I recall I didn’t think it would go anywhere when it was filed.

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jisa t1_j6l5x0l wrote

Thanks--that's good to know!

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uglybushes t1_j6i5y6q wrote

You bought a house in one of the highest tax area with one of the worst school districts. The school district just robbed its residents by building a billion dollar school. Now when homes sell the school district sues you to get your assessment closer to your purchase price. If you fight you will end up being assessed at 80% of your purchase price.

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ktxhopem3276 t1_j6ibljn wrote

Due to ongoing lawsuits the 80% number may be revised to 63%

They spent $140 million on buildings. The high school was $60 mil. Many districts build new schools around the same time. Bethel park built a $100 mil school. The new buildings were symptoms of the problem in Penn hills not the cause. The whole district was run poorly with poor accounting and declining enrollment and a shrinking tax base.

Here is some actual information on the school district instead of made up numbers

https://www.wesa.fm/education/2019-02-05/penn-hills-school-district-172-million-in-debt-according-to-grand-jury-report

https://www.publicsource.org/penn-hills-school-elementary-finances-oversight-academics/

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uglybushes t1_j6ic5k5 wrote

Oh so you think the school was money well spent and not a cash grab by board members and contractors?

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ktxhopem3276 t1_j6id032 wrote

Don’t put words in my mouth. I said the new schools were a symptom not the cause itself. They were part of a larger problem of poor budgeting. My point is other districts built new schools but properly budgeted for it and had the luxury of larger tax base.

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uglybushes t1_j6ida9p wrote

It’s almost like the did have a budget but realized they could grift and steal money in the process and no one would do anything, so they did

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ktxhopem3276 t1_j6ie5io wrote

I’m not disputing that and you are trying to straw man my point. I’m disputing your exaggerated numbers and oversimplification in your original comment that might perpetuate a false narrative that the students didn’t deserve a new school

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uglybushes t1_j6ifdn7 wrote

Home owners don’t deserve the tax rate for quality of schools they receive. New building don’t educate better. 10% of the Money could have been spent on early education and that would have lead to a 1000x better school district in 10 years

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ktxhopem3276 t1_j6ignob wrote

You are still missing the point I’m trying to make. Penn hills wasn’t unique in building new schools. They built new schools without a large enough tax base to pay for them. It’s not like they were a good district before they spent the money. It has become a self fulfilling prophecy as people learn the school district is failing, housing prices go down which means tax rate has to go up. I support early education and they should spend money on the most effective solutions. Your exaggerated numbers are obnoxious

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sparrowmint t1_j6ifxzr wrote

95% of the school districts in this area do the exact same thing with re-assessing any new buyers to outrageous amounts. That's why there's new threads about this issue every single day on this subreddit, with people freaking out from all over the county. I am not sure why you are acting like this is a Penn Hills-specific issue. The millage rate is certainly a Penn Hills issue, but the "newcomers tax/re-assessment" aspect isn't. Especially when if you are re-assessed high enough in some of the richer districts, your tax is still going to be through the roof.

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ktxhopem3276 t1_j6ihxtv wrote

The news picks an issue and beats it death. They like to shit on Penn hills but the old guard admins are gone and they are turning things around. But because click bait articles pay the bills and they are lazy jagoffs, the news media continues to shit on the district and in the process are perpetuating a self fulfilling prophecy of a failing district

Edit: there is still some of old guard around

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Pencilveinyah t1_j6ito0o wrote

The school board president is the same as when the district got into financial distress in the first place. The “old guard” hasn’t changed.

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ktxhopem3276 t1_j6iwhxh wrote

I’m not an expert or a resident but I have followed the news about the district. Is Erin Vecchio this who you are referring to?

Vecchio first served on the Penn Hills school board from 1988 to 2009. She returned to the board in 2016 after the district developed a $172 million debt.

https://www.wtae.com/amp/article/erin-vecchio-running-for-state-representative-in-pennsylvania-house-32nd-district/32715216

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Pencilveinyah t1_j6j379f wrote

She was the board president when the contracts were awarded then she conveniently stepped away while everything was physically being built and the bills were piling up. She often says that she wasn’t president during the time the deficit was created which is technically true but she was in charge of setting the wheels in motion.

From what I remember the architect was a friend of hers and had no previous experience with a project of this type. The architect was also a major reason the project went so over budget….. using imported tiles from Italy are one thing I remember, another was some type of crystal chandelier.

It’s been a few years since I really dug into it so I don’t want to misspeak on any facts but be sure, I am not one with a favorable opinion of Mrs. Vecchio.

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burritoace t1_j6kpans wrote

The amounts are not outrageous, they are sale price or less

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ktxhopem3276 t1_j6ksyy0 wrote

From a tax policy perspective it generally makes the property tax system more progressive instead of regressive. In practice it’s a disincentive against buying a recently renovated house and incentives buying fixer upper and live there forever. It is an inefficient tax policy from the perspective that moving closer to a better job has economic benefits and renovating a house before putting it in the market generates economic activity. As far as I know nobody has a perfect formula

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burritoace t1_j6kunif wrote

Reassessing every year (or close to it) is the best available approach

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ktxhopem3276 t1_j6kv5qr wrote

That benefits someone who never sells like landlords. One way to avoid incentives and disincentives is to assess on land area and property square footage but that isn’t as progressive as the current system which has higher taxes for popular neighborhoods and lower taxes for neglected neighborhoods based on sale value

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burritoace t1_j6kvvkj wrote

The current system benefits longtime property holders way more than regular reassessments would. Taxing people based on property area would be silly because property is bought, sold, and apportioned based largely on value rather than size. The tax is intended to capture a portion of a value-based market.

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ktxhopem3276 t1_j6kw34s wrote

how does assessing every year capture the value of new capet roof or windows if the house isn’t sold?

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burritoace t1_j6kwk32 wrote

There's no reason it can't capture that value. The assessor should know roughly what those cost and how it relates to other comps with similar features. More importantly, regular assessments would capture the value of major improvements and changes in value due to location.

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ktxhopem3276 t1_j6kwqll wrote

But how would an assessor know the carpet was replaced or walls painted?

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burritoace t1_j6kwy0y wrote

Those changes are incidental and pretty meaningless. Significant improvements should have permits or even just be visible from the street.

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ktxhopem3276 t1_j6kx90d wrote

A lot of expensive things don’t require a permit and have a huge affect on sale price like carpet paint roof windows kitchen cabinets countertops. It can affect value by $100k easily

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burritoace t1_j6kydxo wrote

The actual number of renovations that are going to change property values by that much across all those areas is going to be vanishingly small. The biggest factor remains location and that can be accounted for by looking at sales comps. The idea that this stuff is unknowable is pretty silly, I think. Plenty of people in the market engage with these conditions and set prices for properties all the time.

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ktxhopem3276 t1_j6kz91m wrote

I completely disagree. Permits are required for additions and major modifications that affect a minority of houses. The interior condition of a house has a massive impact on sale price.

Even with annual assessments, a landlord can buy a shithole house, gut it, install high end fixtures, jack up the rent and coast on a low assessment forever.

A system that requires a detailed market comparison for every house in the county is not a good use of tax dollars. I’m in favor of more frequent assessments. I just want to point out it’s still not going to fix the “newcomers tax” issue

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burritoace t1_j6l9h6h wrote

>I’m in favor of more frequent assessments. I just want to point out it’s still not going to fix the “newcomers tax” issue

I'm not sure how you figure this. The exact problem you describe here can only exist in a system without regular reassessments. There is no rule that says that assessments can't take into account interior modifications, and permits are required for many of those anyway. The system doesn't work unless the assessments are somewhat accurate, just like it doesn't work if the assessments are not somewhat regular, so I think that is an unreasonable criticism of a proposed alternative.

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ktxhopem3276 t1_j6lbvd1 wrote

Frequency of assessment has no effect either way on newcomer tax if the common level ratio is accurate. Most interior modifications don’t require permits unless they are structural. The housing market is heavily weighted toward flashy cosmetic updates to drive up the price. Nobody wants assessments to be invasive interior inspections. Many exterior modifications can be non obvious like roof and window replacements which don’t require permits. In a low priced neighborhood, renovations can double the house price with no permit updates

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burritoace t1_j6ldbqr wrote

>Frequency of assessment has no effect either way on newcomer tax if the common level ratio is accurate.

There is no CLR if assessments happen on a short, regular schedule. The whole thing is a dumb workaround for a crappy, inconsistent system.

>Most interior modifications don’t require permits unless they are structural.

All building systems typically require permits if they are modified/upgraded. Most substantial interior improvements require structural work in Pittsburgh homes.

>The housing market is heavily weighted toward flashy cosmetic updates to drive up the price.

And these are captured when a house is reassessed at sale.

> Nobody wants assessments to be invasive interior inspections.

That's fine because most interior cosmetic renovations don't have a huge impact on property value.

>Many exterior modifications can be non obvious like roof and window replacements which don’t require permits.

These improvements alone don't have a significant impact on property value. If you put a new roof on your house you won't get anywhere close to 100% of the cost out anytime soon. The same goes for windows, unless you enlarge them (which requires a permit).

>In a low priced neighborhood, renovations can double the house price with no permit updates

A proportional doubling in a low-price neighborhood has less of an impact on the overall tax levied on that property. And these improvements are less likely to have that impact in a neighborhood that is otherwise less desirable (which causes the low prices in the first place).

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ktxhopem3276 t1_j6lfelg wrote

Cosmetic updates don’t require a permit and can be substantially expensive. It is questionable tax policy to tax them one way for new buyers and another way for current owners. You don’t have a magical solution no matter how much you try to wish away how expensive cosmetic updates are

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burritoace t1_j6lgibr wrote

You can keep repeating this and I'll keep repeating the response I've already given. You're not even offering an alternative here!

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ktxhopem3276 t1_j6lgqqk wrote

Because cosmetic repairs are obviously expensive and you are just pretending they aren’t.

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burritoace t1_j6mcexw wrote

Are you aware that an improvement's expense doesn't lead to a 1:1 change in property value? It would be silly to demand that every tiny change in a property's value be captured, and new paint or carpet or whatever lead to tiny changes in value, even if they might cost tens of thousands. Value in this context only exists in relation to the rest of the market, which is why reassessing at sale and regularly thereafter is the best approach.

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ktxhopem3276 t1_j6mqkzx wrote

You are just waving you magic wand to shrink the significance of non permitted changes just because you don’t like hearing that your preferred solution isn’t as clever and amazing as you think it is.

3257 Latonia Ave, Pittsburgh, PA 15216 sold for $230k for 1520 sqft

3215 Latonia Ave, Pittsburgh, PA 15216 sold for $130k for 1450 sqft

Can you guess which one had cosmetic upgrades? It has new carpet, hardwoods, whole house repainted, kitchen cabinets, and bathroom. If they are reassessed at sale price they will pay $90k more in taxes over thirty years even though the smart buyer can spend the same amount renovating his house right after buying it and even just rent it forever instead of ever having to sell if he wants to move elsewhere. Also businesses who can who hire lawyers structure leases and sales to avoid reassessments and taxes. More frequent assessments will make the system a little more fair at an expensive of larger bureaucracy. The clr could be fined tuned by neighborhood boundaries and the county could stop lying about its value by handpicking sales that make it look lower than it is.

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burritoace t1_j6mrijo wrote

Truly bizarre stuff. If one house has had work done and increased in value then it should pay more in taxes. Surely you don't think those houses are worth the same amount? The CLR and irregular assessments are the preconditions for these disparities and you are coming out in defense of them.

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ktxhopem3276 t1_j6ms9s1 wrote

But it’s a loophole to just remodel after the sale if there are annual assessments. I don’t know how you would find these remodels without annual interior inspections of every property in the county.

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burritoace t1_j6mxvg1 wrote

The exact same loophole exists now, except in an even worse form as it is compounded by the shoddy CLR.

>I don’t know how you would find these remodels without annual interior inspections of every property in the county.

You wouldn't, just like you don't now. The system doesn't depend on catching 100% of paint jobs in the county. It would catch larger renovations, and even some cosmetic changes are visible from outside and could be picked up in regular assessments. And again, the reassessment at sale (when the most aggressive property investors attempt to realize their gains) can catch many more situations.

You're making a mountain out of a molehill to defend the status quo, but that molehill exists even under the status quo! It doesn't make sense.

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ktxhopem3276 t1_j6mzwqp wrote

That person didn’t pay $100k more for the paint job. That’s just waving a magic wand to pretend my point doesn’t exist. Non permitted renovations in the $50k range seem to be getting crazy high premiums in the last couple years. It’s entertaining listening to you refuse to admit the basic situation of the current housing market because you are obsessed with having a solution that has no downsides

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burritoace t1_j6n2bzg wrote

>Non permitted renovations in the $50k range seem to be getting crazy high premiums in the last couple years.

This depends entirely on the location of the house and other factors, and the difference between assessed and true value (before sale) still comes down largely to the fact that the last assessment was in 2012 and doesn't account for vast changes in the housing market since then.

The work in that house isn't limited to a paint job but you are committed to missing the point here. And I don't know what "perfect solution" you are imagining here, I've already acknowledged that no solution is ideal. Only one of us thinks the current model is even remotely acceptable and it's not me! Please go project your goofy arguments on to someone else.

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ktxhopem3276 t1_j6n407q wrote

you are exaggerating the effectiveness of annual reassessments to feel superior while ignoring the costs and deploying hyperbolic strawmans to avoid admitting your solution is mediocre and full of loopholes. it has implementation challenges and bureaucratic waste, while calculating a clr for each neighborhood is orders of magnitude cheaper than reassessing every house annually

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ktxhopem3276 t1_j6n5ypl wrote

If a democrat tries to implement annual assessments it will be committing career suicide and hand the county to republicans. Democrats could fix the clr with less bad publicity and spend political capital on more important issues. Let a Republican figure out the shitty property tax system because they refuse to raise income taxes

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ktxhopem3276 t1_j6mtvpi wrote

We could get rid of school property taxes and only use property taxes for municipality and county services and instead fund schools using an equitable and just distribution of state income tax (double it and make it progressive) The city has school property taxes half of most surrounded municipalities. That works for the city because it doesn’t have as many retired people as the suburbs.

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burritoace t1_j6mxgyg wrote

Lol I'm in favor of changing the way schools are funded but this is a total digression

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ktxhopem3276 t1_j6lda83 wrote

If I buy a 100,000 house and before I bought it the windows roof and carpet were replaced for 20,000 and common ratio is 50, I pay taxes on 50,000. If I buy that house before the repairs are made for 80,000 and pay the 20,000 to renovate, I pay taxes on 80,000. Unless I’m missing something, the first scenario I would pay a whopping 25% more in taxes than the second option. Over a 30 year mortgage on a 100,000 house at 30 mils that’s an extra 18,000 in taxes for a renovated house versus a fixer upper

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burritoace t1_j6le2mi wrote

If you buy a home with a higher value (ie new windows, roof, and carpet) you should indeed expect to pay more in taxes.

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ktxhopem3276 t1_j6led36 wrote

But why should someone who makes the same repairs without selling pay less?

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burritoace t1_j6lgaxn wrote

Lol it seems like you're not really reading my comments here and instead projecting your own attitudes onto me. I think all improvements should be captured, you said that's impossible. That your criticism hinges on whether or not minor improvements are captured does not strengthen it. No system is perfect but more regularly capturing these changes and eliminating the CLR would fix the most glaring ones.

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ktxhopem3276 t1_j6lhu8a wrote

> IThat your criticism hinges on whether or not minor improvements are captured does not strengthen it.

Not permitted doesn’t imply minor cost

> No system is perfect but more regularly capturing these changes and eliminating the CLR would fix the most glaring ones.

Don’t they reassess permitted changes anyway under the current system? If I add an addition to my house I’m under the precession they would trigger a reassessment

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burritoace t1_j6mcq46 wrote

Cost still isn't the same as value. Stop treating them as interchangeable.

They don't necessarily reassess after renovation because the whole system is wildly inconsistent. It depends on many factors, including the muni and SD's interest in appealing - I'm not sure the SD even gets building permit info.

Thanks to the CLR and relentless appeals the final change in tax bill is also smaller so it's often not worth the effort. But who knows, under the current system it's just a subjective free for all.

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ktxhopem3276 t1_j6mo2qi wrote

I’m not advocating for the current system. I’m just pointing out there is no way to fix the newcomer tax. Value is proportional to cost - usually 75%.

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burritoace t1_j6moswr wrote

The "newcomer tax" can only exist in a system without regular universal assessments. I think you are missing something here. And that 75% is not at all correct.

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