Does Pennsylvania Real Estate Tax Treat Businesses Differently Than Residences?

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How did your real estate tax assessment turn out this year? Did you wind up owing fewer taxes, or did rising property values also make your taxes go up? If the assessment did raise your property taxes then you would probably file an appeal, but did you know that your district can also appeal a tax assessment if it’s too low? A group of high-value commercial properties found themselves at the center of such appeals, and now the situation has worked its way up to the Pennsylvania Supreme Court.

Does Pennsylvania Real Estate Tax Work Differently for Businesses Than It Does Residences?

The Upper Merion Area School District brokered a deal with Keystone Realty to have the company review tax assessments in order to identify under-assessed commercial properties. Keystone was offered 25 percent commission of any increased revenues from the under-assessed commercial properties identified, but many businesses that fell into the effort’s crosshairs cried foul.

The District filed appeals, based on Keystone’s recommendations, in the Montgomery County Board of Assessment Appeals. The board denied those appeals, but the district pushed them into the Montgomery County Court of Common Pleas under appeal. While these appeals awaited trial, owners of apartment buildings affected by these appeals filed a civil case. Valley Forge Towers Apartments v. Upper Merion Area School District, 163 A.3d 962 (2017) posed that the district’s appeals violated the Uniformity Clause of the Pennsylvania Constitution by not also targeting residential assessments. The District and Keystone made objections that were sustained, forcing the civil action into dismissal. However, the apartment building owners didn’t give up.

These owners took their case to the Pennsylvania Supreme Court, which reversed the ruling of the Commonwealth Court that affirmed the cases dismissal. It found that all properties situated in a taxing district are considered a “single class” thanks to the Uniformity Clause. This prevents local taxing authorities from treating commercial and residential properties differently when it comes to exercising the District’s right to appeal.

When it comes to your taxes or real estate dealings, paying attention to details like this can be essential for the attorney representing you. Find out more about the finer details of Pennsylvania’s real estate law by following the real estate attorneys at Troncelliti Law Associates. Our experience is what makes our legal services trustworthy.