Who's ready to do some math?! 🧮 PA's property taxes bring in a huge share of the municipal revenue and services across the state. 💸
However, there's a catch. Depending on when a county last assessed its property values, local governments either be flush with cash or coming up short. 😵💫 Here, we take the mystery out of these calculations to see what's really going on.
Here’s Five Fast Facts on PA's property tax calculations:
- 🏡 Run of the Mil - Municipalities use a unit called a "mil" to calculate property taxes. The value of a mil is one dollar for every $1,000 of the assessed value of a property. For example, if a municipality has a property tax rate of 1 mil and the assessed value of a house is $100,000, the owner will pay $100 in property taxes.
- 🤔 But Here's the Twist - The problem? The assessed value of a property doesn't always reflect the true market value. The reliability of the calculation mostly depends on how recently a county performed a reassessment. For example, a county who did their last assessment back in the 70s will have much lower property values than one that reassessed just last year. So, even though the value of a mil doesn't change, the worth of the mil can vary pretty widely.
- 🏘️ Highs and Lows - Here's how different things can be: in Lower Merion Township (Montgomery County), 1 mil equals more than $7.7 million in revenue. Over in Shippensburg Borough between Franklin and Cumberland Counties, 1 mil equals just below $14,000 in revenue.
- ⚖️ Well, That's Interesting - According to the PA Constitution, taxes and assessments are required to be uniform. However, there aren't any rules on when assessments must be done.
- 💰 Closing the Gap - So how do we fix things? One proposed way involves the state realty transfer tax. This tax is based on the market value of a property, not the assessed property value. This tax could be used to bridge the gap between outdated assessments and real world property values.
🔥Bottom line: Wealthy areas like Lower Merion are sitting pretty with a ton of tax revenue from the folks who live there. However, other counties aren't so lucky. Correcting the difference between assessed property values and market value could be a game-changer, depending on where you live. Of course, it could also result in higher taxes!
When was the last time your county had an assessment?
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