In 2015, property taxes in Pennsylvania were a bone of contention between legislators and private groups who advocated abolishing revenues that fund a large piece of public school budgets in the state. Democratic Governor Tom Wolf, in the midst of a prolonged budgetary standoff with the Republican legislative majority, seeks hikes in personal income and sales taxes for 2016-2017, proposing an 11% hike in wage taxes and extending the state's 6% sales tax to cable television services and movie tickets. The Pennsylvania Taxpayers Cyber Coalition (PTCC) has been lobbying to completely eliminate school taxes by likewise shifting the tax burden, expected to reach $14.18 billion by 2017. Narrowly defeated in November 2015, the PTCC backs Senate Bill 76, a proposal that seeks to raise sales taxes 1%, or 2% in Pittsburgh and 3% in Philadelphia, over the current level while also raising state wage taxes to 4.34%, effectively eliminating the tax levied upon homeowners.

One of the main arguments by the PTCC for eradicating school tax is the disproportionate share of property taxes realized by senior citizens who face annual increases that cut into fixed incomes. Furthermore, the group takes issue with rising numbers of statewide tax sales that often force homeowners out of dwellings in which residents spent most of their lives. State Sen. Mike Folmer, a Republican from the 48th legislative district in Lebanon County and a proponent of eliminating school tax, chides opponents of SB 76 in a 2015 missive, stating the opposition provides no valid or specific counterproposal. Rather, the parties against eliminating school tax merely offer sweeping generalizations pledging a "responsible approach" utilizing "sustainable and proven strategies."

Property Tax Rates in Pennsylvania

The median property tax rate in Pennsylvania is $2,223 per year for a home that holds a median assessed value of $164,700 in 2015. Tax rates are expressed in mills or $1 for each $1,000 of assessed property value. Each county in the state has its own methodology for determining assessed property values that include county, municipal and school taxes. Therefore, a fair comparison for taxation among all counties is based on the effective tax rate or what percentage of a home's median value is spent annually on property taxes. Essentially, a $3,000 tax levied on a home with an assessed value of $200,000 produces an effective tax rate of 1.5%, or (property tax/assessed property value)*100.

The highest effective property tax levels in the state are seen in Allegheny County, anchored by the city of Pittsburgh, where the median assessed value of a home, last assessed in 2012, is $122,400, with a median annual tax payment of $2,649, or a 2.16% average annual effective tax rate. By contrast, Bedford County, just south of Altoona and bordering Maryland to the south, has an effective rate of 0.91% on a median home value of $120,200.

Pennsylvania Taxes Compared to Neighboring States

Using the effective tax rate, comparisons can be made to levels in states that border Pennsylvania. While New York City has one of the highest costs of living in the United States, its effective tax is 0.72%. This is less than half the 1.58% average rate in the rest of the state, which sits 7 basis points above the 1.51% average rate in Pennsylvania for 2016.

Maryland ranks tied for 27th in the nation for effective property tax rates among states in 2016. With a 1.08% rate, the state nonetheless has counties such as Montgomery, just north of Washington D.C., that have some of the highest median home values in the nation. In Montgomery County, where the median home value is $446,300, a homeowner pays a median annual tax of $4,123.

National Property Taxes Versus Pennsylvania's Rates

Pennsylvania has the 39th highest effective tax rate in the United States at 1.51% of median assessed home value. The national average rate in 2014 was 1.29%, which is 22 basis points lower than Pennsylvania and higher than the average annual rates of 35 of the 50 states and the District of Columbia. Many Pennsylvanians primarily clamor for reform to school tax, the largest component of a resident's annual property tax bill. Seeing the power of school districts to continually raise taxes to state-allowed maximum thresholds, residents are left to wonder how and when relief might come.

Vermont Property Tax Guide

Related Articles
  1. Taxes

    9 States Where You'll Pay the Most in Taxes

    Which state you live in can mean thousands of dollars saved or lost in taxes each year. Here's a list of states to avoid when it comes to tax rates.
  2. Investing

    10 Best States to Own a Big House

    On top of the low property taxes and average housing costs, these states all tend to have great natural beauty and land worth building on.
  3. Taxes

    10 Best States for Property Taxes in 2016

    Whether you are thinking of moving or just curious to see whether your state is in the top 10, these rankings are eye-opening.
  4. Taxes

    Overall Tax Burden By State

    Start here, to research states with the heaviest tax burdens. The charts below compare them by income tax, sales tax and property tax.
  5. Taxes

    This Is How Property Taxes Are Calculated

    Understanding how property taxes are calculated will help you avoid being overcharged.
  6. Taxes

    10 States With High Sales Taxes

    Most states have sales taxes of some kind for goods and services. Here's a rundown of the states that have the highest sales taxes.
  7. Taxes

    States That Pay The Most Taxes

    These five states may pay through the nose in taxes - but the benefits may just be worth it.
  8. Taxes

    Use Tax Vs. Internet Sales Tax: How Are They Different?

    Learn about the differences between a use tax and an Internet sales tax. Find out about transactions in which the taxes apply, and to whom they apply.
  9. Taxes

    The History Of Taxes In The U.S.

    The number of taxes that we now consider a given did not always exist. Find out how they arose.
  10. Taxes

    The Tax Implications of Moving During Retirement

    What are the tax implications of moving during retirement? They could likely affect your cost of living.
Frequently Asked Questions
  1. I don't understand how a stock has a trading price of 5.97, but when I buy it I have to pay the asking price of 6.04. How can I be paying more than what the stock is trading for?

    It might seem logical that the last traded price of a security is the price at which it would currently be trading, but this ...
  2. Why do people say that September is the worst month for investing?

    One of the historical realities of the stock market is that it typically has performed poorest during the month of September.
  3. What are the benefits of an investment club and how can I find one?

    An investment club is a great way for investors to make money, share ideas and learn about the market from others.
  4. What are the advantages and disadvantages of using systematic sampling?

    Learn about the primary advantages and disadvantages of using a systematic sampling method when conducting research of a ...
Trading Center