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ktxhopem3276 t1_j6kv5qr wrote

Reply to comment by burritoace in School Me on the Property Tax Assessment Appeal by 3RudySquared

That benefits someone who never sells like landlords. One way to avoid incentives and disincentives is to assess on land area and property square footage but that isn’t as progressive as the current system which has higher taxes for popular neighborhoods and lower taxes for neglected neighborhoods based on sale value

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burritoace t1_j6kvvkj wrote

The current system benefits longtime property holders way more than regular reassessments would. Taxing people based on property area would be silly because property is bought, sold, and apportioned based largely on value rather than size. The tax is intended to capture a portion of a value-based market.

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ktxhopem3276 t1_j6kw34s wrote

how does assessing every year capture the value of new capet roof or windows if the house isn’t sold?

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burritoace t1_j6kwk32 wrote

There's no reason it can't capture that value. The assessor should know roughly what those cost and how it relates to other comps with similar features. More importantly, regular assessments would capture the value of major improvements and changes in value due to location.

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ktxhopem3276 t1_j6kwqll wrote

But how would an assessor know the carpet was replaced or walls painted?

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burritoace t1_j6kwy0y wrote

Those changes are incidental and pretty meaningless. Significant improvements should have permits or even just be visible from the street.

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ktxhopem3276 t1_j6kx90d wrote

A lot of expensive things don’t require a permit and have a huge affect on sale price like carpet paint roof windows kitchen cabinets countertops. It can affect value by $100k easily

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burritoace t1_j6kydxo wrote

The actual number of renovations that are going to change property values by that much across all those areas is going to be vanishingly small. The biggest factor remains location and that can be accounted for by looking at sales comps. The idea that this stuff is unknowable is pretty silly, I think. Plenty of people in the market engage with these conditions and set prices for properties all the time.

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ktxhopem3276 t1_j6kz91m wrote

I completely disagree. Permits are required for additions and major modifications that affect a minority of houses. The interior condition of a house has a massive impact on sale price.

Even with annual assessments, a landlord can buy a shithole house, gut it, install high end fixtures, jack up the rent and coast on a low assessment forever.

A system that requires a detailed market comparison for every house in the county is not a good use of tax dollars. I’m in favor of more frequent assessments. I just want to point out it’s still not going to fix the “newcomers tax” issue

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burritoace t1_j6l9h6h wrote

>I’m in favor of more frequent assessments. I just want to point out it’s still not going to fix the “newcomers tax” issue

I'm not sure how you figure this. The exact problem you describe here can only exist in a system without regular reassessments. There is no rule that says that assessments can't take into account interior modifications, and permits are required for many of those anyway. The system doesn't work unless the assessments are somewhat accurate, just like it doesn't work if the assessments are not somewhat regular, so I think that is an unreasonable criticism of a proposed alternative.

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ktxhopem3276 t1_j6lbvd1 wrote

Frequency of assessment has no effect either way on newcomer tax if the common level ratio is accurate. Most interior modifications don’t require permits unless they are structural. The housing market is heavily weighted toward flashy cosmetic updates to drive up the price. Nobody wants assessments to be invasive interior inspections. Many exterior modifications can be non obvious like roof and window replacements which don’t require permits. In a low priced neighborhood, renovations can double the house price with no permit updates

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burritoace t1_j6ldbqr wrote

>Frequency of assessment has no effect either way on newcomer tax if the common level ratio is accurate.

There is no CLR if assessments happen on a short, regular schedule. The whole thing is a dumb workaround for a crappy, inconsistent system.

>Most interior modifications don’t require permits unless they are structural.

All building systems typically require permits if they are modified/upgraded. Most substantial interior improvements require structural work in Pittsburgh homes.

>The housing market is heavily weighted toward flashy cosmetic updates to drive up the price.

And these are captured when a house is reassessed at sale.

> Nobody wants assessments to be invasive interior inspections.

That's fine because most interior cosmetic renovations don't have a huge impact on property value.

>Many exterior modifications can be non obvious like roof and window replacements which don’t require permits.

These improvements alone don't have a significant impact on property value. If you put a new roof on your house you won't get anywhere close to 100% of the cost out anytime soon. The same goes for windows, unless you enlarge them (which requires a permit).

>In a low priced neighborhood, renovations can double the house price with no permit updates

A proportional doubling in a low-price neighborhood has less of an impact on the overall tax levied on that property. And these improvements are less likely to have that impact in a neighborhood that is otherwise less desirable (which causes the low prices in the first place).

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ktxhopem3276 t1_j6lfelg wrote

Cosmetic updates don’t require a permit and can be substantially expensive. It is questionable tax policy to tax them one way for new buyers and another way for current owners. You don’t have a magical solution no matter how much you try to wish away how expensive cosmetic updates are

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burritoace t1_j6lgibr wrote

You can keep repeating this and I'll keep repeating the response I've already given. You're not even offering an alternative here!

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ktxhopem3276 t1_j6lgqqk wrote

Because cosmetic repairs are obviously expensive and you are just pretending they aren’t.

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burritoace t1_j6mcexw wrote

Are you aware that an improvement's expense doesn't lead to a 1:1 change in property value? It would be silly to demand that every tiny change in a property's value be captured, and new paint or carpet or whatever lead to tiny changes in value, even if they might cost tens of thousands. Value in this context only exists in relation to the rest of the market, which is why reassessing at sale and regularly thereafter is the best approach.

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ktxhopem3276 t1_j6mqkzx wrote

You are just waving you magic wand to shrink the significance of non permitted changes just because you don’t like hearing that your preferred solution isn’t as clever and amazing as you think it is.

3257 Latonia Ave, Pittsburgh, PA 15216 sold for $230k for 1520 sqft

3215 Latonia Ave, Pittsburgh, PA 15216 sold for $130k for 1450 sqft

Can you guess which one had cosmetic upgrades? It has new carpet, hardwoods, whole house repainted, kitchen cabinets, and bathroom. If they are reassessed at sale price they will pay $90k more in taxes over thirty years even though the smart buyer can spend the same amount renovating his house right after buying it and even just rent it forever instead of ever having to sell if he wants to move elsewhere. Also businesses who can who hire lawyers structure leases and sales to avoid reassessments and taxes. More frequent assessments will make the system a little more fair at an expensive of larger bureaucracy. The clr could be fined tuned by neighborhood boundaries and the county could stop lying about its value by handpicking sales that make it look lower than it is.

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burritoace t1_j6mrijo wrote

Truly bizarre stuff. If one house has had work done and increased in value then it should pay more in taxes. Surely you don't think those houses are worth the same amount? The CLR and irregular assessments are the preconditions for these disparities and you are coming out in defense of them.

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ktxhopem3276 t1_j6ms9s1 wrote

But it’s a loophole to just remodel after the sale if there are annual assessments. I don’t know how you would find these remodels without annual interior inspections of every property in the county.

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burritoace t1_j6mxvg1 wrote

The exact same loophole exists now, except in an even worse form as it is compounded by the shoddy CLR.

>I don’t know how you would find these remodels without annual interior inspections of every property in the county.

You wouldn't, just like you don't now. The system doesn't depend on catching 100% of paint jobs in the county. It would catch larger renovations, and even some cosmetic changes are visible from outside and could be picked up in regular assessments. And again, the reassessment at sale (when the most aggressive property investors attempt to realize their gains) can catch many more situations.

You're making a mountain out of a molehill to defend the status quo, but that molehill exists even under the status quo! It doesn't make sense.

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ktxhopem3276 t1_j6mzwqp wrote

That person didn’t pay $100k more for the paint job. That’s just waving a magic wand to pretend my point doesn’t exist. Non permitted renovations in the $50k range seem to be getting crazy high premiums in the last couple years. It’s entertaining listening to you refuse to admit the basic situation of the current housing market because you are obsessed with having a solution that has no downsides

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burritoace t1_j6n2bzg wrote

>Non permitted renovations in the $50k range seem to be getting crazy high premiums in the last couple years.

This depends entirely on the location of the house and other factors, and the difference between assessed and true value (before sale) still comes down largely to the fact that the last assessment was in 2012 and doesn't account for vast changes in the housing market since then.

The work in that house isn't limited to a paint job but you are committed to missing the point here. And I don't know what "perfect solution" you are imagining here, I've already acknowledged that no solution is ideal. Only one of us thinks the current model is even remotely acceptable and it's not me! Please go project your goofy arguments on to someone else.

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ktxhopem3276 t1_j6n407q wrote

you are exaggerating the effectiveness of annual reassessments to feel superior while ignoring the costs and deploying hyperbolic strawmans to avoid admitting your solution is mediocre and full of loopholes. it has implementation challenges and bureaucratic waste, while calculating a clr for each neighborhood is orders of magnitude cheaper than reassessing every house annually

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ktxhopem3276 t1_j6n5ypl wrote

If a democrat tries to implement annual assessments it will be committing career suicide and hand the county to republicans. Democrats could fix the clr with less bad publicity and spend political capital on more important issues. Let a Republican figure out the shitty property tax system because they refuse to raise income taxes

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ktxhopem3276 t1_j6mtvpi wrote

We could get rid of school property taxes and only use property taxes for municipality and county services and instead fund schools using an equitable and just distribution of state income tax (double it and make it progressive) The city has school property taxes half of most surrounded municipalities. That works for the city because it doesn’t have as many retired people as the suburbs.

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burritoace t1_j6mxgyg wrote

Lol I'm in favor of changing the way schools are funded but this is a total digression

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ktxhopem3276 t1_j6lda83 wrote

If I buy a 100,000 house and before I bought it the windows roof and carpet were replaced for 20,000 and common ratio is 50, I pay taxes on 50,000. If I buy that house before the repairs are made for 80,000 and pay the 20,000 to renovate, I pay taxes on 80,000. Unless I’m missing something, the first scenario I would pay a whopping 25% more in taxes than the second option. Over a 30 year mortgage on a 100,000 house at 30 mils that’s an extra 18,000 in taxes for a renovated house versus a fixer upper

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burritoace t1_j6le2mi wrote

If you buy a home with a higher value (ie new windows, roof, and carpet) you should indeed expect to pay more in taxes.

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ktxhopem3276 t1_j6led36 wrote

But why should someone who makes the same repairs without selling pay less?

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burritoace t1_j6lgaxn wrote

Lol it seems like you're not really reading my comments here and instead projecting your own attitudes onto me. I think all improvements should be captured, you said that's impossible. That your criticism hinges on whether or not minor improvements are captured does not strengthen it. No system is perfect but more regularly capturing these changes and eliminating the CLR would fix the most glaring ones.

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ktxhopem3276 t1_j6lhu8a wrote

> IThat your criticism hinges on whether or not minor improvements are captured does not strengthen it.

Not permitted doesn’t imply minor cost

> No system is perfect but more regularly capturing these changes and eliminating the CLR would fix the most glaring ones.

Don’t they reassess permitted changes anyway under the current system? If I add an addition to my house I’m under the precession they would trigger a reassessment

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burritoace t1_j6mcq46 wrote

Cost still isn't the same as value. Stop treating them as interchangeable.

They don't necessarily reassess after renovation because the whole system is wildly inconsistent. It depends on many factors, including the muni and SD's interest in appealing - I'm not sure the SD even gets building permit info.

Thanks to the CLR and relentless appeals the final change in tax bill is also smaller so it's often not worth the effort. But who knows, under the current system it's just a subjective free for all.

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ktxhopem3276 t1_j6mo2qi wrote

I’m not advocating for the current system. I’m just pointing out there is no way to fix the newcomer tax. Value is proportional to cost - usually 75%.

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burritoace t1_j6moswr wrote

The "newcomer tax" can only exist in a system without regular universal assessments. I think you are missing something here. And that 75% is not at all correct.

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