The deadline to file real estate tax assessment appeals for the 2017 tax year in Allegheny County is March 31, 2017, which is rapidly approaching.

If you are an owner of commercial property, factors to consider in evaluating a possible appeal include a recent purchase price near or below the current assessment, tenant vacancies or concessions resulting in declining income, increased operating expenses, or major capital expenditures. If any of these factors apply to your property, an appeal may be warranted.

Additionally, it has been five years since Allegheny County last reassessed properties, and the current assessments are no longer 100% of the property’s hypothetical fair market value. By law, both the Allegheny County Board of Property Assessment Appeals and Review (the administrative agency to whom a real estate tax assessment appeal is filed) and the Allegheny County Court of Common Pleas must apply a ratio (called the common level ratio (“CLR”)) to equalize property values.

The 2017 CLR for Allegheny County is 87.1%. The CLR can be applied to a current fair market value to reduce an assessment. For example, a property situated in the City of Pittsburgh and currently assessed at $10 million (but also having only a present fair market value of $10 million) should be assessed at $8,710,000. Based on 2017 millage rates, the reduction potentially available on this hypothetical property would result in tax savings of more than $20,000.

We are happy to evaluate the merits of real estate tax appeals on commercial properties in Allegheny County. Please contact us to request an evaluation of your property’s assessment.

Client Alert 2017-081