Ever since Lancaster County announced that it would conduct a county-wide property tax reassessment, there have been myths circulated as facts by residents that don’t understand the reassessment. And as is the case with most myths, somehow they get bantered around as facts and cause people to formulate false assumptions that have nothing to do with reality. So let’s start shattering some myths.
MYTH: I got my new reassessment in the mail and it went up $25,000. I’m going to get killed when I get my next tax bill.
Take a deep breath. Not necessarily.
There are two factors used when calculating a property’s real estate taxes. Here is the basic formula: Assessed Value X Millage Rate = Real Estate Taxes.
During a reassessment year in Pennsylvania, millage rates must be adjusted so that a taxing jurisdiction (i.e. county, municipality, school districts) doesn’t collect any more taxes than it did the previous year prior to the reassessment. In other words, the amount collected must be revenue neutral. As a result, you could have some property owners pay more, some will pay less, and for some, it will be a wash.
If the county and municipality feel they need to increase total tax revenue during a reassessment year to cover costs, they have to hold a special vote. However, the additional revenue is capped at 10% from the preceding tax year. School districts have a lower cap which is provided by the State Department of Education. At present, that index is around 2-3%. Continue reading