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What is an accurate property assessment?

Ideally, homes are assessed at 100% of their market values. That’s what happens immediately after a countywide reassessment.

But assessment values become inaccurate over time as the real estate market changes. To keep new assessments in line with old ones, the PA Department of Revenue sets a Common Level Ratio factor for each county every July.  

For example, Montgomery County has a 2021-2022 common level ratio factor of 2.24, meaning market value should equal 2.24 times the assessment.  Doing the math in reverse, Montco assessments should equal about 44.643% of market value.  So, a home with a market value of $100,000 would be assessed at about $44,643, and that assessed value would be used to calculate local property tax bills.

Here’s the math behind that percentage:

Assessment
_______________

Market Value


   =   

1
______________

2.24
(Common Level Ratio factor)


   =   


    44.643%  

If you want to figure out the market value that the county is using — meaning, you want to know what the county thinks a property is worth — multiply the assessed value by the common level ratio factor.  Using the Montgomery County example above: $44,643 (assessed value) x 2.24 (ratio) = $100,000 (market value as determined by county).

Here are the Common Level Ratio factors and assessment value percentages* for Greater Philadelphia counties:

8.299%
Bucks County
Common Level Ratio factor = 12.05
Last assessment in 1972
45.045%
Chester County
Common Level Ratio factor = 2.22
Last assessment in 1998
100%
Delaware County*
Common Level Ratio factor = 1
Last assessment in 2021
44.643%
Montgomery County
Common Level Ratio factor = 2.24
Last assessment in 1996
93.458%
Philadelphia County
Common Level Ratio factor = 1.07
Ongoing assessments (AVI)
*Percentages rounded to three decimal places.

This Philadelphia Inquirer article provides more explanation on assessments and appeals in the Greater Philadelphia region.

 * Delaware County just completed a court-ordered countywide reassessment, the values of took effect in 2021. Learn more about that in our blog post:  Delco reassessment project: an overview.

 

 

Posted by: Pete Kennedy on Wednesday, July 21, 2021 at 12:00:00 am
tags: 

Comments

Hi Jim, No -- the county can't reassess your neighbor's home based on a change in ownership. If the new owner makes changes that would impact the value of the property (e.g., renovations or demolition), that could trigger a reassessment by the county. In either case, your assessment would not change until the next countywide reassessment, unless you make changes to your own home or file an appeal.
Posted by: Pete Kennedy on September 8, 2021 at 9:27:59 am

Thanks Pete. If my neighbor sells her house for 50% more than she paid three years ago will Montgomery County increase the house's assessed value? Asking since I'm concerned my property taxes could double since my house is identical. Thanks.
Posted by: Jim O’Brien on August 30, 2021 at 6:37:14 pm

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