REAL ESTATE: Common Level Ratio Factor Changes on July 1

Posted By Cliff Tuttle | July 1, 2009

Posted by Cliff Tuttle (c) 2009

When you transfer real estate in Pennsylvania below fair market value in a non-arms-length transaction, the Department of Revenue usually requires you to do a calculation which is supposed to approximate fair market value for purposes of paying realty transfer tax.

In order to accomplish this feat, you are instructed to multiply the assessed value by the common level ratio factor. This common level ratio factor is a number generated by the State Tax Equalization Board. It is actually the reciprocal of the common level ratio, which is the ratio that the property assessments bear to sales data for the year preceding. During the period of between July 1, 2008 and June 30, 2009, the CLR factor for Allegheny County was 1.16. Beginning on July 1, 2009 and for the next year, the factor has been reduced to 1.14.

This is the first time this factor has decreased for Allegheny County since 2003. It had been 1.00 in 2001, reflecting the 2000 reassessment, which was by definition at 100% of fmv. Then, in 2002, the CLR factor shot up to 1.06.

The following year, 2003, reflected a downward turn in market prices as the factor sank to 1.03. However, by that time the County Council put a cap on assessments, using 2002 as the base year. This held assessment values steady while sales prices rose and the CLR factor has been rising steadily ever since.

7/1/04 1.07
7/1/05 1.10
7/1/06 1.10
7/1/07 1.15
7/1/08 1.16, and finally
7/1/09 1.14

The CLR factors in other counties reflect the assessment systems there. However, if you need to fill out a Statement of Value for another county, here are the CLR factors for around the State.

CLT

Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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