County-wide Reassessments

Reassessment is the process of recalculating the market and assessed values of all properties in a county as of the same date in time. Reassessment is an important function of county government because it updates the values used for calculating property taxes, which are the largest source of revenue for counties, boroughs, townships and school districts. However, reassessments generally occur infrequently because it is a burdensome and costly process for a county to undertake. Therefore, some counties have had periods of 40 years or more between reassessments, while other counties systematically try and reassess their properties every four or five years.

During reassessment, a county reevaluates the assessed value of all properties within its boundaries. The first step in determining a properties assessed value is determining its market value. The market value of a property is the price at which a property would transact with both a willing, but not obligated, buyer and a willing, but not obligated seller, neither of whom are under duress. In general, a county-wide reassessment would determine market value of a property by reviewing recent transfers of property within the neighboring area, visually inspecting the exterior appearance of the property in question and a correlation of any other unique factors that may affect the valuation of the real estate. The assessor would then correlate these factors and, through the use of his or her expertise and training, arrive at an estimate of what the fair market value of the property would be. Once the market value is determined, this number is then multiplied by the “established predetermined ratio,” which is defined as the ratio of assessed value to market value established by the board of county commissioners and uniformly applied in determining assessed value in any year. See 72 P.S. § 5342.1.

The multiplication of the market value by the established predetermined ratio equals the assessment on the property. County, township, borough and school district property taxes are then paid upon a certain percentage of these assessed values depending upon the taxing jurisdiction’s millage rates. For example, a 10-mill tax rate is equivalent to a tax of 1.0% of assessed value. Therefore, if you had an assessed value of $100,000 on your business, your property tax, at 10-mills would be $1,000, i.e., $100,000 x .01.

For business owners, making sure your property is properly reassessed is very important because the new assessed value of the property can only be changed by another county-wide reassessment, an improvement to the property or by a successful appeal by either the property owner or the taxing jurisdiction. By filing an appeal of a new assessed value, a property owner can save significant property taxes if successful in reducing its property's assessed value because the assessed value is used for multiple years. Therefore, it is highly recommended that an appeal be considered on any property affected by a county-wide reassessment so that the correct assessed value is determined as soon as possible.