04/30/2024
Hey Montco home owners! Did you buy a new home in the last year and are shocked by the real estate tax bill you received in the mail a few weeks ago? Here are a few things you should know before calling your county real estate assessment office.
1. Real estate taxes are based off an "assessed value" that the county's real estate assessment office sets. What is the assessed value?
Assessed value = estimated fair market value (FMV) / a common level ratio (CLR)
2. The CLR for Montgomery County PA = 2.82
3. Real estate taxes are calculated by taking the assessed value and multiplying it by a "millage rate" see link below to Montco's millage rates, which vary by municipality and school district.
https://www.montgomerycountypa.gov/622/County-Municipality-Millage-Rates
4. If your home is your primary home (not used as a 2nd home or rental/investment property), make sure you apply for the homestead exclusion to reduce your tax bill.
5. You can recalculate your assessed value by taking the estimated FMV of your home divided by 2.82 to arrive at an equivalent assessed value. You can also take the assessed value per your tax bill and multiply it by 2.82 to arrive at the estimated FMV that the county real estate assessment office used. If you bought your home with in the last year, you can compare this estimated FMV to the purchase price (or appraised value when you purchased your home). Depending on when you purchased your home you may need to adjust the original purchase price / appraised value slightly due to increases in home prices over the last year.
For example, if you bought a home in the last year at a $500,000 purchase price, and your tax bill reflects an "assessed value" of $225,000, if may seem great...until you do the math! With an assessed value of $225,000, the equivalent FMV used for your Montco tax bill is equal to an estimated FMV of $634,500, which is 27% higher than the price you purchased your home less than 1 year ago.
6. You can appeal your real estate tax assessment. You can do this on your own or hire someone to help with the appeal process. The key in appealing your real estate tax assessment is that you are appealing the estimated FMV used by the county's real estate assessment office. The burden of proof is on you to prove that your property's FMV is lower than that used by the county's real estate assessment office. Be prepared with comparative home values to provide to the county assessment office. Comparing your taxes or assessed value to your neighbors taxes or assessed value is not a valid argument (even though you think it is); you must justify and prove that the estimated FMV used is incorrect.
7 You can file an appeal, but the tax assessment office may disagree with your opinion of the estimated FMV for your home, and they may have reasons for not using the prior purchase price as a baseline for the assessed value determination. There is no guarantee that by appealing you will reduce your tax assessed value; it could stay the same or increase!
8. How and when can you appeal?
The deadline for filing an annual appeal for Montco is August 1 to be effective for the following tax year. Now is the time to to your homework and file the paperwork if you plan to appeal your real estate tax assessment. In appealing your assessment the first step is simply completing an assessment appeal form. Appeal forms are available several different ways:
1. online:
https://www.montgomerycountypa.gov/464/Board-of-Assessment-Appeals
2. Phone: at 610-278-3761
Office hours are 8:30 a.m. - 4:15 p.m.
3. In person: Pick up a form at the Montgomery County Board of Assessment Appeals Office in Norristown, located at One Montgomery Plaza, 3rd floor, Suite 301 425 Swede & Airy Streets.
Filing Fees:
This is a non-refundable processing fee.
Check or money order made payable to: Montgomery County Treasurer for each application.
Single Family Residential or Individually Owned Condominium (excluding apartments) - fifty dollars ($50.00)
Residential (multi-family) (duplexes) - one hundred dollars ($100.00)
Commercial and Industrial (including apartments) - two hundred dollars ($200.00)
Preferentially Assessed Properties (Act 319, Act 515) - fifty dollars ($50.00)
Exemptions - two hundred dollars ($200.00)
There are two different types of appeals:
1. Annual - You have the right to appeal your assessment once a year. The deadline for filing is August 1 to be effective for the following year. Annual appeal hearings start in May and must be heard by October 31.
2. Interim - Appeals must be filed within 40 days of the mailing date stated on the assessment change notice.
It is important that the appeal form be completed accurately, indicating the location of the property appealed, the parcel number (the parcel number may appear as the account number on your tax bill), list any unavailable dates, include your daytime telephone number in case we have any questions, your opinion of MARKET VALUE, and the name and address to which the notice of the hearing should be mailed. Make sure you have signed the appeal form. A separate form must be used for each property and parcel number being appealed.
If you're planning to buy a home or other real estate property, make sure you calculate your estimated real estate taxes before you buy. Your real estate taxes most likely will increase, but it's better to be prepared than to get surprised.
Questions on anything above? Reach out to me! As a CPA and real estate sales professional, I take pride in getting the numbers right, whether it's an estimated home valuation for a sale, a purchase, or estimating real estate taxes.
Luke Curley, Realtor
Realty One Group Restore
215-859-6365
[email protected]
