To all my friends in Chester County, PA, please circle May 1, 2010 on your calendars and then read on. I have a story to tell.
We built a brand new home here in North Coventry in April 2004. Like many of you, we watched with great concern and unhappiness as the value of our home plunged through the bursting of the housing bubble.
To make matters worse, unexpected changes in employment status left us very few options to relocate without losing a boatload of money. Furthermore, we really like here in Chester County and we really didn’t want to move.
We had to find a way to tighten our belts and reduce our expenses. When we moved into the house, we filed for an appeal of our tax assessment and we were able to reduce the assessment by quite a bit.
Property tax assessments in Pennsylvania are calculated by a formula called the Common Level Ratio (CLR) which is applied to the fair market value of the property. The CLR is recalculated annually and by 2008 it had reduced been significantly from our first appeal. The reduced CLR combined with the decreasing fair market value of our home led me to believe that we might be able to reduce our property tax assessment even further.
We filed the appeal, hired an appraiser to determine the fair market value of our home and appeared at our assessment hearing. The hearing went very quickly and smoothly and a few weeks later we were notified that the assessment had been reduced.
Now, for the good news!
We, like many people, escrow our tax payments with our mortgage company. While the assessment was reduced, the new tax bills weren’t processes by our lender until January and July 2009. This week the lender recalculated our escrow requirements. Since our tax liability had been reduced, they sent us an escrow refund of $4750! Furthermore, the escrow portion of our monthly mortgage payment reduced by $350/month!
So, what’s the significance of May 1?
That is the start of the period in which the County Board of Tax Assessment Appeals accepts appeal applications. The last day of appeals is August 1. You can find more detailed information about the tax appeal process at The Official Chester County Website
I will remind you all when we get closer to the May 1 date so keep checking back here for more information.
Peace.
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