Mt. Lebanon appeals ahead
Mt. Lebanon will appeal 26 more residential property assessments in 2015, after reaching back as far as the late 1980s to find the most underassessed homes based on sale prices.
Meanwhile, an association representing Pittsburgh-area Realtors is using Mt. Lebanon as an example of how not to choose homes to reassess. It hopes to start pressuring the municipality for more transparency.
After accusations of a “newcomer's tax” filled commission chambers last year, with recent transplants shocked to find the municipality challenging their homes' taxable values while their longer-tenured neighbors went untouched, the commission and staff set out to develop new criteria to determine who was paying taxes on less than what their homes were worth.
“They wanted to cast a wider net, to find the most egregious properties,” said Finance Director Andrew McCreery.
McCreery said the commission and staff looked at Mt. Lebanon homes that sold for more than $200,000, then ran the resulting 2,600 properties' sales prices through a “housing price inflation index” to see what they would be in 2014 dollars.
They then compared the current assessments, which took effect in 2013 during the countywide reassessment process, to those inflation-adjusted sales prices.
The 41 residential properties whose assessments were less than half the adjusted sales price were sent to Diversified Municipal Services, whom the commission hired last week at a cost of $175 per appeal, to have them find comparable homes.
DMS winnowed the field to 26 by dropping properties if the difference between their prices and their comparable homes was less than $100,000, or if Mt. Lebanon appealed them in the previous two rounds. Those owners will be notified of the appeal by March 31, McCreery said.
Rather than targeting recent home sales, the new method picked out just five homes that were sold in 2014, he said. The rest were from prior to 2005 and went back as far as 1989, though the municipality had already filed about 450 appeals on homes that were assessed at 80 to 85 percent of what they sold for between 2006 and 2013.
Those appeals and the uproar they brought to commission meetings were why the Realtors Association of Metropolitan Pittsburgh chose Mt. Lebanon as the first focus of their “End the Newcomer Tax” campaign, said RAMP Executive Vice President John Petrack.
“They have the full, legal right to do so, but it isn't fair to new homebuyers,” Petrack said. “(People) move in, and six months to a year later, their taxes go up 25 to 50 percent.”
The Allegheny Institute for Public Policy this week published a report that found municipalities filed 1,483 assessment appeals in 2014, with Mt. Lebanon representing 287 — 19 percent — of those. The city of Pittsburgh filed all but one of the others, although school districts across Allegheny County filed an additional 2,860 appeals in 2014.
Petrack said the least that communities could do was to follow consistent, public criteria for determining which sales get appealed, so buyers could look at their potential home's assessment, look at what they are offering to pay and know whether they were candidates to get appealed, and budget accordingly.
Lenders might also want to know whether a property's monthly payments would be likely to jump and make their decisions on whether to grant a mortgage accordingly, he said.
“My issue all along has been the disclosure,” said Mike Suley of Mt. Lebanon, a reassessment consultant and the former manager of the Allegheny County Office of Property Assessments. “If you buy a car, wouldn't you rather know the sales tax at the point of sale, not a year later?”
So far, RAMP's website, endthenewcomertax.com, urges people to attend Mt. Lebanon's March 10 commission meeting and has contact information and an email form for the commissioners, but Petrack said he'd like eventually to expand the focus to other municipalities and school districts that target sales, including Pittsburgh.
Matthew Santoni is a staff writer for Trib Total Media. He can be reached at 412-380-5625 or email@example.com.