Deadline: Property owners who don’t like what they hear from OPA can appeal to the Board of Revision of Taxes by Oct. 7.
Homeowners who asked the city to lower their new property assessments should start checking their mailboxes and calendars.
About half of the 17,000 completed property value reviews are in the mail, said Michael Piper, the city’s deputy chief assessment officer.
However, the Office of Property Assessment received almost 50,000 requests to review the new assessments the city sent out to owners earlier this year, and all of those requests won’t be processed until the end of September, Piper said in an Aug. 13 phone interview.
Those who don’t like what they hear from OPA can take their dissatisfaction to the next level and appeal to the Board of Revision of Taxes, but they have to do that by an Oct. 7 deadline.
Most of the people whose reviews were among those processed before Aug. 13 probably won’t like what they hear from OPA. Piper said 13,000 of those 17,000 processed reviews are denials.
OPA looked first at the requests that seemed easiest to handle, Piper said, and, it was pretty easy to deny those 13,000 because many homeowners didn’t back up their claims.
“There wasn’t anything to support the assertion we were wrong,” he said.
People who did little more than state that they thought their new assessments were too high aren’t likely to see those assessments go down, Piper explained. Review requests that showed surrounding properties have been selling for less or included other information, however, aren’t so easy for appraisers just to shoot down.
But even data that included a professional appraisal and photos didn’t help local Realtor Chris Artur, who said OPA denied his request to lower the assessment on a vacant Frankford Avenue commercial property he owns.
The OPA doesn’t just say no all the time.
“We issue ‘Revision’ notices in instances where we decide that a revision is warranted,” Piper stated in an Aug. 15 email to the Northeast Times. That notice includes details on the new proposed assessment, including any decrease or increase in value or any change in taxable status.
But whether the OPA says yea or nay, the notice will include an instruction on the property owner’s rights to file a BRT appeal.
A DIFFERENCE
The OPA’s review process is something new this year.
For tax purposes, Philadelphia properties used to be assigned values that didn’t seem anything near the money they would draw when sold. A city assessment was about a third of market value and the tax rate was set based on that fraction. Trouble is, some properties were underassessed and some were overassessed, resulting in a lot of variety, but not much fairness.
The purpose of the citywide Actual Value Initiative was to assess all properties fairly at their actual market values. That meant, of course, that new assessments were bound to be higher, maybe even much higher, than they were. When AVI assessments started arriving, homeowners experienced some sticker shock. The assumption was that a higher assessment would guarantee a tax increase, a bitter notion since homeowners had seen several tax increases the past few years. Some were further alarmed by mistakenly believing the assessments would be used to raise their taxes this year. The new values will be used in computing 2014 real estate taxes.
By law, the city had to set a new tax rate so it could bring in revenues equal to those brought in before AVI. Still, there were bound to be owners who would see their taxes rise, some whose taxes would be more or less stable, and some who would see their taxes drop a bit.
As the new assessments were being mailed in the spring, it was predicted Northeast property owners for the most part would see taxes remain about the same or dip a bit. But there were months between the dates when owners saw the new assessments and when City Council set the new tax rate.
Local elected officials started to hear complaints: identical homes assessed differently; modest homes near more expensive properties valued like the higher-priced spreads; a retention basin previously assessed at $2,000 marked up 61 times to $122,000.
In an ordinary year, an owner would take a request to lower an assessment right to the Board of Revision of Taxes. The BRT, which used to assess properties too, usually handles 1,000 to 2,000 appeals annually, executive director Carla Pagan told the Northeast Times in the spring. Since nobody seems to be able to recall the last time there was a citywide reassessment, the city anticipated many more than 2,000 people would want to dispute AVI results.
So, the city gave owners a new and early way to challenge their new assessments — the first-level review that OPA now is completing.
“[It’s] sort of a free bite of the apple,” Piper said.
DECISIONS, DECISIONS
A lot of property owners won’t get much time to consider appealing the outcomes of their OPA reviews. An owner who learns toward the end of September that OPA refused to lower an assessment will have about a week to file an appeal with the BRT.
But that’s only if that property owner waits for OPA’s opinion. Piper said that anyone who suspects a denial will be coming from the OPA can file an appeal with the BRT now. So you can cover your options while you’re watching the calendar. Anyone who gets good news from OPA can choose not to follow through with a BRT appeal, he said.
Artur advised owners to think beyond taxes before filing their appeals.
“It depends on what you’re going to do with the property,” he said in an Aug. 15 phone interview.
A high assessment actually might prove to be a boon to someone who plans on selling soon, he said. The city’s assessment numbers will be used by sellers and buyers, he explained.
If nearby properties are selling at $200,000, for example, a higher city assessment might help a seller draw higher bids. In the same vein, a lower assessment might make it difficult for a seller to get buyers to agree to a price comparable to those of recently sold neighboring properties.
There’s another date homeowners should keep in mind: Sept. 13.
That’s the deadline for homeowner-occupants to apply for the $30,000 Homestead Exemption. Under the exemption, an approved homeowner will see $30,000 shaved from the assessment for tax purposes. A house assessed at $100,000 would be taxed as if it were a $70,000 house. The exemption is a tax break, but it doesn’t mean the house is worth only $70,000.
Homeowners can apply for the exemption by phone by calling 215–686–9200. ••
Tax facts:
Number of requests to review market values: Between 49,000 and 50,000
Number of those requests processed before Aug. 13: About 17,000
Number of those requests denied: About 13,000
Top reason for refusing to lower assessment: No supporting information.
Deadline for appealing to the Board of Revision of Taxes: Oct. 7, 2013
Tax year new assessments will be used: 2014
Deadline for applying for the $30,000 Homestead Exemption: Sept. 13
Tax rate for 2014: 1.34 percent, or $1,340 for every $100,000 of property value.
