Perpetual Easement and Land Use Reassessment Notices
State law provides for the periodic reassessment of real property in counties and cities in the Commonwealth. A requirement, as a part of that reassessment, is the county must send a change in assessment notice to land owners of record. That notice is to include both the new and immediately prior assessed value. Both of the values are computed at the fair market value level.
This requirement works well for properties that are not in any special assessment program. However, properties that are under easement and/or the Land Use program are a little more complicated. As a result, those properties receive two notices.
Perpetual Easement Properties
For those parcels under perpetual easement (including PDR properties), the first notice, the Reassessment notice, has the comparative taxable values for the buildings shown with both previous and new values. However, the land value is not a comparative taxable value. The new value depicts what the land may be valued without the required statutory easement valuation methodology applied. Since the previous taxable value does have the statutory easement valuation methodology applied, Reassessment notice does not give a good comparison for the land portion. The notice sent to land owners with easement has a special instruction advising that second notice will be forthcoming.
The second notice with the new taxable value will be computed by the Commissioner of the Revenue’s office after the Reassessment is complete. At that time, the easement valuation methodology will be applied. A new notice of change in assessment is generated and mailed to the affected property owners. This notice has a more useful comparison with respect to the land value as it will compare taxable values rather than fair market value to taxable value.
Land Use Properties
For those parcels in the Land Use Program, the process is similar except that, the reassessment notice does have a fair market to fair market value comparison on the original notice. However, after the Reassessment is complete, parcels in land use are also revalued by the Commissioner of the Revenue’s office using the land use value methodology and affected property owners are sent a new notice of change in assessment.
The appeal process is available to property owners through the Board of Equalization for appeals of the fair market value portion of the assessment which includes any home site or structures. The key difference in those properties in the Land Use Program and those under Easement, with respect to appeal for correction of value, involves “deferral”.
Parcels in land use have a deferral tax meaning that should circumstances dictate a removal from the program, the property owner could be liable for a rollback tax that would involve repayment of the deferred tax for up to five years. Therefore, the fair market value placed on the parcels as shown on the Reassessment Notice may have a bearing on future tax liability and should be carefully considered in deciding whether to appeal the new assessed value.
No Deferral on Easement Property
Parcels under easement, while valued using the land use methodology, are not in land use and therefore have no such deferral. Therefore, when considering the value shown as land value on the Reassessment Notice, only the home site value will carry through to the eventual taxable value. The balance of the land value on the notice is in effect a placeholder. The subsequent Change in Assessment Notice sent by the Commissioner of the Revenue lists the net taxable value.