It's once again time for Pennsylvania economists and mathematicians to meet and play with the Common Level Ratio. What adjustments did they make, and what effect will it have on property taxes here in Reading, PA, and Berks? Let's find out.
Property taxes are always a hot button issue here in Reading and Berks. All too often, the news relating to property taxes brings tears to the eyes of most homeowners. That said, I'm pleased to report that for the sixth consecutive year the Common Level Ratio has increased! Yes, we can actually use the words increase and taxes in the same phrase, and it is a good thing.
So what is a Common Level Ratio Anyway?
If you go to the PA Department of Revenue website and the State Tax Equalization Board (STEB) website, it may give you a better idea of what the Common Level Ratio is, or it may provide you with a raging headache. You can visit my website at JeffreyHogueRealtor.com, where I have posted links to the sites mentioned above.
Let me attempt to cut through the clutter. The Common Level Ratio, or CLR, is a mathematical way for counties here in PA to avoid the effort and cost of completing reassessments each year. Pennsylvania counties are evaluated on the strength of their home sales. If the data shows a rise in property value, a more significant gap between the market value and assessed value emerges. The Common Level Ratio is then applied to create a fair and level playing field for property taxation. While this is a novel and cost-effective way of doing things, it often does not stop the million dollar home built in 1820 from having lower taxes than the newly constructed $400,000 property in the same School District.
Benefits of a Higher Common Level Ratio
According to economists, we are in an improving value market as it relates to property in Berks County, PA. This year the Common Level Ratio Factor increased to 1.61. Using the 1.61 CLR Factor, a home with a market value of $100,000 would assess for approximately $62,100 or 62.1% of its value. We arrive at the adjusted value by dividing $100,000 by 1.61 equaling 62.1%. Last year the CLR Factor was 1.46 or 68.5% of a homes market value, a decrease of roughly 9.3%. The more your property tax assessment goes down, the less you will pay in property tax.
Consider This Before Rushing Out to Appeal Your Property Taxes
It's a good thing when you are taxed less on your real estate. One way you can take advantage of the higher CLR Ratio is to appeal your property's value assessment. The window to appeal your property taxes here in Berks County is July 1, 2019, through August 15, 2019.
You may want to research the present value of your home by employing the services of a certified appraiser or contacting a Realtor. There will be a fee for the appraisal valuation service, and some agents may charge a fee as well. There are also many home valuation tools on the web which are not as accurate but will get the ball rolling. As previously described, take the perceived value of your home and divide that number by 1.61. If the new value is less than your present assessment figure, you may want to consider appealing your property taxes. You can visit the Berks County Assessment Office Website to check your current assessment.
Be cautious if you decide to appeal your property tax assessment. You may find out your property is presently under-assessed even with the higher CLR Ratio. When you file an appeal, you are opening up the record. If the appeals board determines your home is under assessed, they have the right to adjust the value accordingly.
You may want to speak with a knowledgeable Realtor before embarking on the assessment appeal journey. A Realtor can provide valuable guidance in many areas, including referring appraisers, if needed.
Another bit of advice - This is the highest the Common Level Ratio has been since the last countywide reassessment in 1993. I'm betting the Berks County property tax assessment office is going to be very busy, and the assessment window is not that big. It may be best to get your appeal in as early as possible.
Think this property tax stuff is complicated, yeah, me too. Wouldn't it be much easier if our legislators did away with the whole school tax thing sooner than later.
Knowledge is Power!
Jeffrey C. Hogue