Every year, the Commonwealth of Pennsylvania State Tax Equalization Board (“STEB”) establishes a common level ratio (“CLR”) of assessed value to market value of real estate for each of Pennsylvania’s 67 counties for the prior calendar year, which are to be issued by the July 1 effective date. In 2012, however, the CLR for Philadelphia was not established until December, and published in early January 2013- prior to that time, the previous year’s CLR of 25.2% was used. The recently published CLR for Philadelphia, effective July 1, 2012 through June 30, 2013, is 30.6%.
The reciprocal of the CLR, called the common level ratio factor (“CLRF”), is used to calculate a property value in certain types of property transactions, for example, where property is sold to a judgment creditor at sheriff sale for costs. In such a case, the property’s assessed value is multiplied by the CLRF, creating a “computed value” and the realty transfer tax is calculated based on that value.
As a result of the change in the CLR, the CLRF for Philadelphia applicable to transactions from July 1, 2012 through June 30, 2013 has decreased from 3.97 to 3.27. Accordingly, judgment creditors and others who paid realty transfer taxes on computed value transactions in Philadelphia from July 1, 2012, which had been calculated at the higher rate, are entitled to a tax refund.