Where is a real estate reassessment not a real estate reassessment? In Bucks County. We have just been told so, 220,000 times.
If you are one of the 220,000 people who own property in Bucks, you have just received a very confusing mailing. The letter addressed to you shows, in large letters, your property's "Current Assessment", followed by more large letters saying "New Assessment", and an increase of 400 percent!
But before you grab for the defibrillator, read the fine print. It says that this is "NOT a reassessment of your property".
Confused? Turn to the accompanying brochure. It is intended to explain what actually is being done, using something called the Predetermined Ratio (PDR). But what does it say, right on the cover? "Since 1972 all properties have been assessed at 25% of the 1972 fair market value. After January 1, 2005, all property will be assessed at 100% of the 1972 fair market value".
Sure sounds like a gargantuan reassessment to me. But, no, inside it says in two more places "This is NOT a reassessment". Guess I was wrong. Hold on, maybe this will help: "You may file for a formal appeal hearing with the Board of Assessment Appeals".
Still confused? You're certainly not alone. Veteran writers for three local newspapers all concluded exactly the same thing, "Assessments will quadruple".
To be fair (yes I am), we haven't really fallen back into the days of Sherwood Forest, where the royal tax collectors took every last penny. A reassessment by any other name will not cost our residents anything - yet - if the local municipalities follow through with the anticipated cut in tax rates to 25%. Assessments up, and tax rates down, equals no change. Maybe.
The kicker here is that towns can then raise their taxes by 10%, and this (non)reassessment makes it possible for some of them to do so, where they could not before. That actually is the purpose of this (non)reassessment, to allow those areas which were up against state limits on tax rates to, in essence, start again at a lower number, while not losing any current revenue.
A second tax-related letter will be arriving soon, and this one will have an immediate impact. Quakertown School District just adopted a $64.5 million budget that is 12.5 percent higher than this year's plan. Taxes will rise by 53 mills, from 368 to 421. A resident living in the proverbial "average" home will see a $318 tax increase, from $2,208 to $2,526.
There is the old saying about nothing being certain except death and taxes, but at least death only happens once. Tax increases are like being pecked to death by sparrows. A little here, a little there. Eventually you want to swat them away. But what can you do?
Try a tax appeal (remember that Board of Assessment Appeals?) It's free, you can do it yourself, and at least 50% of those who file appeals get a reduction. About 45,000 county properties are significantly overassessed, by 15 percent or more. To see if that includes you, try this test...
Get a realistic current market value for your house. You can use a recent settlement sheet, an appraisal (free from most realtors), or three recent sales of similar properties in your neighborhood. Multiply the number by 3.1 percent (.031). If your assessment is higher than that total, you probably are overassessed.
Additional information and appeal forms are available at www.buckscounty.org , or by calling 215-348-6219.
But if you are grousing about your school taxes, don't. There is actually some very encouraging news. While those taxes are going up by hundreds of dollars, the value of your home has been increasing by thousands. Tens of thousands. Or more. Every year. "Development", that nasty word which incites critics, and swings elections, has, in reality, had a very positive effect on us.
The values of our homes have risen. Dramatically. Skyrocketed, even. Particularly in the Quakertown School District.
We are the big winners in Bucks! Three of our four municipalities are among the top 10 increases in the county. From 1998-2003, the median price of a home in Haycock catapulted 78% to $255,000. Richland abodes increased 57% to $234,000. Even Quakertown Borough, which relies mainly on resales of older homes, was up 47% to $156,450. Milford is the straggler at only 33% and $210,000.
Do the math. It will take a whole lot of $318 school tax bumps to offset the $50,000 - $100,000 increases local homeowners have seen in their property values. These are real dollars that you will have for retirement, or for your children. You can even enjoy them now by taking out a home-equity loan.
In last year's election in Richland, the increased school taxes were a big issue. One candidate claimed that development in the area was causing those taxes to soar, supposedly hurting all taxpayers. Many people seemed to have bought that theory without looking any further. It is now apparent that, while the school taxes did rise, the huge increase in property values brought on by those developments was far, far greater.
Local residents, especially those who have owned their homes for a long time, may see those taxes returned a hundredfold. The black cloud of higher taxes has been obliterated by the silver (now gold) lining of huge potential profits.
Reassess that! And when you hear "development", smile.