Everything you need to know about the Delaware County PA Reassessment
Have you heard about the Delaware County reassessment? There’s been both a lot of media attention and also a lot of confusion around why there is a reassessment and what it means for Delaware County taxes.
I had a lot of questions about how this would affect my portfolio, so I did a lot of research and am here to share what I learned and what effects it will have on you and your tax bills.
What is a tax assessment?
A tax assessment is the county's method of finding the value of your home. This number is part of the equation that determines your tax bill and is based on market values from the previous assessment.
In some counties, the assessment is updated annually, bi-annually, when the property is transferred, or on another predetermined schedule.
In Delaware County, current assessments are based on values from 1998; that’s over 20 years ago. The outdated assessments are the root cause of Delaware County’s reassessment.
Want to find your home’s current assessed value?
To find your current assessed value, click here and use the search tool to find your home's public record, then scroll down to the assessment section.
Why does Delaware County need a reassessment?
A lot can happen in the market over 20 years. The dot com boom/bust, the great recession, and the rapid rise of Wawa are all prominent examples that likely had an effect on values in Delaware County, with no update to the assessed values to compensate.
In 2017, two families challenged the county's assessment process, claiming their assessments were too high. As a result of that case, the court found that this was a countywide issue and that assessments were so inconsistent they violated the state constitution. The judge ordered a countywide reassessment to ensure everyone was paying their fair share of property taxes in the county.
A county-wide reassessment is when the county places new assessed values on every property in the entire county. This is based on the current market.
Rising tides lift all boats, but not equally.
The problem the case found was not just that the assessments were inaccurate (that can be compensated for), but that they were inconsistently inaccurate. This creates two problems.
When new properties are built in higher-priced markets, the assessments are often based on newer, much higher values. This results in a much higher tax bill as a percentage of market value than older homes.
The other problem relates to the appreciation of different neighborhoods at different rates. Areas like Media and Radnor have seen values skyrocket since the last assessment, while areas like Collingdale and Glenolden have remained flatter. This means that residents of the higher valued areas pay a lower county tax bill as a percentage of their market value. The same can be said within municipalities and school districts.
The Delco reassessment
By now you should have already received a letter from the county giving you your initial assessed value. If you are purchasing a new property in the county in 2020, it is VERY important to get that new assessment value from the seller, since it is likely not reflected on public records yet.
The new assessments will be effective in January 2021.
There was a process for an informal appeal, then a formal appeal, which needed to be submitted by September 1. If you missed both of these, you will likely have to settle for your newly assessed value for 2021, with the ability to appeal it for the 2022 tax year. We have had success hiring a lawyer to handle these appeals. Keep an eye on your mailbox for lawyers advertising this as a service, as they generally are specialized in this process, and usually work on commission. Our lawyer charged half of our first years savings for example. We saved over $28,000 in 2020 on 22 properties. They were well worth their commission! They are now helping us appeal the reassessment and I expect us to save even more in 2021.
2 Tips to consider when seeking a review or formal appeal
The initial assessment letters outline two very important points to this whole process, both of which seem to be causing a lot of confusion among Delaware County residents.
1. Assessments Depict Market Values From July 2019
The first point is that these assessments are meant to depict market values from July 2019.
The question to ask yourself is- "Could I reasonably sell my house for this much on the open market?". If the answer is an emphatic “yes” because it is so low, then you should be happy. If the answer is “probably not” or “no” because it is too high, then consider gathering evidence of why you feel your home has been improperly assessed.
The best evidence will be comparable sales to your house. A Broker Price Opinion (BPO) can be done by most licensed real estate agents and it will show your property in comparison to other properties like yours that have sold in the area. While prices vary wildly, it can generally be done for around $50.
Another option is a full-blown appraisal. While more expensive, these reports are generated by specifically licensed and trained appraisers who are qualified to give you the most accurate value and should give your claims more credibility in a review or appeal. Consider opting for an appraisal if you think your property is grossly overassessed.
2. Reassessment does not necessarily mean a tax increase
The second point is that the governing bodies are legally barred from increasing tax revenue solely based on the reassessment. Any overall increase in taxes would be a result of an increased budget that needs to be voted on by the officials of that municipality, county, or school district. Many property owners will actually see their tax bills go down. Officials from Tyler Technologies have said that, in their experience with reassessments, about 1/3 of properties have increased tax bills, 1/3 stay the same, and 1/3 go down.
What does the Delaware County reassessment mean to me?
This is the most important question. While it is too early to speak in specifics, it is important to know a little bit about your immediate area.
There are two numbers that are most important to you:
- How much your assessment changed from current
- How much you think your general area went up in market value.
If your assessment went up less as a percentage than the rest of your area, chances are your taxes will go down. The opposite is also true; if your assessment went up more than your general area, then your taxes may increase.
Think about your home relative to your municipality, your school district, and the county as a whole to get the full picture.