Are You Paying Too Much on Property Taxes?

By Kelly M. Walsh

If you own any real estate, you are likely familiar with the Property Tax and School Tax bills that come annually to tax you based on the value of that real estate. Many homeowners may be missing out on exclusions and rebates that may benefit them and reduce their Property Tax obligations.

Homestead and Farmstead Exclusions

The Taxpayer Relief Act of 2006 provided homeowners and farmers with relief from school tax. Your local school district receives a portion of the state’s gaming revenues and reduces tax obligations for taxpayers who receive Homestead and Farmstead exclusions based upon the amount of gaming revenues it receives.

If you are using a piece of real estate you own as your primary residence, you are entitled to claim a homestead exemption. The exemption reduces your tax obligation based upon the portion of your real estate that is used as your home, not including land and other out buildings. If you own a farm consisting of ten or more acres, you can also claim the farmstead exemption to exempt all buildings and structures on the farm.

Homestead and Farmstead exclusions do not apply automatically. You must submit an application in advance in order to be approved for Homestead and Farmstead exclusions. The application deadline this year is March 1, 2019. The application is managed by and must be submitted to the applicable County Assessment Office. After becoming approved, the taxpayer must reapply for the exclusion every three years, or notify the County Assessment Office of any changes to their qualification criteria.

Senior Citizens Property Tax and Rent Rebate

The Taxpayer Relief Act of 2006 provides for a rebate of property tax or rent paid by senior citizens and people with disabilities, who are often the hardest hit by property tax increases. The Property Tax and Rent Rebate Program is available to eligible Pennsylvanians age 65 and older, widows and widowers age 50 and older, and people with disabilities age 18 and older. The Property Tax Rebate is available to homeowners on a stepped scale with income up to $35,000. The Rent Rebate is available on a stepped scale to renters with income up to $15,000. The rebate is calculated based on the taxpayer’s household income and total property tax or rent paid. The maximum standard rebate is $650. There are additional rebates for taxpayers in Philadelphia, Pittsburgh, and Scranton due to the higher tax rates in those areas.

In order to claim the rebate, the taxpayer must first pay their property tax or rent, and then apply to receive a rebate. The application is administered by the Pennsylvania Department of Revenue. The application deadline this year is June 30, 2019. The funds supporting this program come from the Pennsylvania lottery and from slots gaming.

Disabled Veteran Real Estate Tax Exemption

Qualifying Disabled Veterans may be entitled to full exemption from real estate taxes on a piece of real estate the veteran owns and occupies as a primary residence in the Commonwealth of Pennsylvania.

In order to qualify, the veteran must have been honorably discharged. The veteran must have a total or 100% permanent service-connected disability rating by the US Department of Veterans Affairs, or be blind, paraplegic, or have lost two or more limbs resulting from military service. The veteran must also have a financial need for the exemption. Currently need is presumed for veterans with an annual income of $92,594 or less.

If the disabled veteran passes away, the exemption may pass on to the veteran’s widow, so long as he or she remains unmarried and can show financial need.

This exemption is managed by the County Veterans Affairs Director. In order to obtain this exemption, the veteran must apply and prove qualification.

Appeal Property Assessment

Property and school taxes are determined based on the assessed value of your real estate. If you believe the assessment is inaccurate, you can file an appeal and request that the assessment be corrected to more accurately reflect the value of your property. Appeals must be made to the County Board of Assessment by an annual deadline set by each county, or within 40 days of the date of a new assessment.

Once the appeal is filed, it will be scheduled for a hearing, at which you will be required to present evidence of the fair market value to a neutral decision maker. This is a judicial procedure, which may require expert testimony and at which you may benefit from legal representation.

If the appeal results in a reduction to the assessed value of your real estate, it will likewise reduce the amount of property taxes you owe. If you disagree with the decision, you may file further appeal to the Court of Common Pleas.

Ask about a consultation to explore your unique tax situation, call 717 657 7770.