Some School Districts And Municipalities Impose Newcomer Tax To Hike Your Property Assessment
PITTSBURGH (KDKA) -- If you've bought a house recently, it's likely you got an unexpected notice in the mail from your school district or municipality.
It's called the newcomer tax, and it's not a pleasant way to be welcomed to the neighborhood.
Remember the welcome wagon or newcomers club or other ways communities used to welcome you to the neighborhood? Today, it's more likely you will get an unwelcome letter from your elected officials wanting to raise your property assessment.
When Curt Winzenreid bought his home in Baldwin, he says he got a nasty welcome letter from the Baldwin-Whitehall school board.
"The school district wanted to increase the assessment by roughly $130,000," Winzenreid told KDKA money editor Jon Delano.
He's hardly alone. Brett Balash just received a similar letter, in his case, demanding a $54,000 hike in his assessment.
"I did not see this coming at all. Doing the quick math, it's going to nearly double my taxes," said Balash.
"We were really confused at first. We'd never seen anything like it," says Stephanie Zewe, Balash's spouse.
They never expected the district to use their recent purchase price to hike the assessment of their home that had been set – and frozen – by Allegheny County in 2012 for all their neighbors.
"We're upset," says Zewe. "There's really no reason to have different assessments for every single house, especially when you've just moved in. It doesn't seem fair to single out and target specific property owners just because they recently moved."
"The whole thing seems kind of dishonest in that they are only seeking out people who have purchased a new home. If you've been in the community for 20 or 30 years, they're not going to seek out to have your home reassessed," says Winzenreid.
It does seem unfair, and some school districts and communities have a reputation for being particularly unfriendly to newcomers, says Mike Suley, who once headed the county's Office of Property Assessment
Delano: In this particular situation, we're looking at the Baldwin Whitehall school district.
Suley: They're aggressive.
Baldwin-Whitehall is not alone. Suley says last year the Pittsburgh school district filed 800 appeals to increase the assessments of new purchases of homes in the city. It's easy money for school districts and municipalities, says Suley.
"They file an appeal. They win over 90 percent of these appeals. They go in and show the sale price, and that's it. They win," he says.
But not always at the amount they want. Suley and the Realtors Association of Metropolitan Pittsburgh have led an ongoing campaign to stop it.
Suley says property owners should fight it. On the first appeal, the assessment will not be the purchase price.
"The common rule is now 81.1 percent of the sale price. In other words, if the house sells for $100,000, the new assessment will be $81,100."
Once you get the new assessment, Suley recommends filing a second appeal online within 30 days. It may take a year, but then, says Suley, "You sit down with the lawyers from the school district, the solicitors, and you make a deal. And that's what the courts encourage you to do."
That should bring down your assessment a bit more. Still not fair compared to your neighbors, but better than doing nothing.
There's something else you can do: Elect school board members and municipal officials who oppose the newcomer tax.
For example, former Pittsburgh Mayor Bill Peduto ordered an end to the newcomer tax in the city, although the school board, which is independent, still continues the practice. KDKA reached out to Baldwin-Whitehall's solicitor for comment, but no response yet.