Guide to Central PA Property Taxes by School District

    1Header-Century 21 Core Partners- Guide to Central PA Property Taxes by School District

     

     When you own real estate, you need to pay property tax. The cost of property tax can differ widely from area to area, and they can even vary by property line. That’s because many municipalities, or counties, determine what to charge based on the amount of revenue they anticipate needing for the year. In most areas, school districts also collect a portion of the property tax and determine the rate to charge based on outstanding bonds or debts.

    What Are Property Taxes in Pennsylvania?

    Counties utilize property taxes for many things. Municipal property taxes might help to pay for road repairs, trash and recycling pickup or other services offered by the county or city. Libraries earmark some Central PA property taxes for their use.  School taxes might pay for supplies for students, round out teachers’ salaries, repair existing buildings or fund the construction of new buildings.

     

    What is the PA Property Tax Rate?

     There’s no statewide property tax rate in Pennsylvania. Instead, individual counties, municipalities and school districts determine property taxes. Since each area and school district can calculate its tax rate based on its needs, there’s a broad range of variation across the state. Property owners who live in the same county, but in different school districts, might pay vastly different amounts in taxes, even if the assessed value of their homes is equal.

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    Although there is a considerable amount of variance from county to county, and school district to school district, the median property tax paid in PA is $2,223 on a home valued at $164,700 (the median home value statewide). That works out to a median property tax rate of 1.35 percent.

     

    Are Property Taxes and School Taxes the Same?

    School tax is a part of property tax, but school tax alone isn’t the only component in the property tax you pay. School tax, however, makes up the largest portion of the property tax bill. In some areas, school districts frequently raise the tax levy, which can make some homeowners feel overly burdened by property taxes.

     

    How Do I Calculate My Property Tax?

    Your school district and municipality estimate projected costs for the year, and that number ultimately determines the amount that you will pay in property tax. Many counties use a mill levy (millage rate) to calculate the tax rate. The millage is the amount per $1,000 that a property owner needs to pay in property tax.

    Century 21 Core Partner's Guide to Central PA Property Taxes by School District

    To calculate the mill levy, the county first adds up the revenue required for the upcoming year. Next, the county divides that amount by the assessed value of all property in the area. For example, City A determines that it needs $500,000 in revenue for the upcoming year. The total value of property in the city is $5,000,000. City A would divide $500,000 by $5,000,000 to get 0.10, or a mill rate of 10.

    In Pennsylvania, it’s not only the municipality or county that decides how much a person pays in property tax. School districts also play a pivotal role in determining the final amount. For example, the School District in City A might decide that it needs $250,000 in revenue for the upcoming year. If it were to divide that by $5,000,000, or the total value of real property in the area, it would get 0.05, or 5 mills.

    The city’s tax levy gets added to the school district’s levy to determine the total levy on properties in the area. So, in this example, the total mill levy is 0.15, or 15 mills.

    How much property tax you pay is also influenced by the assessed value of your home. If you live in City A and own a house with a value of $200,000, for example, your property tax would be determined by multiplying the mill rate (.15) by the value of your home ($200,000), then dividing that amount by 1,000. The result is the amount of tax you owe for the year. In this case, you’d owe $3,000.

    Depending on where you live and how the area calculates the value of your home, the assessed value might be the same as the market value of your property. It’s important to note, however, that it can be more or less, too. Since counties and school districts do make mistakes, it’s imperative to know the mill rate and your home’s actual assessed value. That way, you can be sure that you’re not paying more property taxes than necessary.

    If you think your home’s value has been assessed incorrectly, you usually have the option of appealing the value (but not the tax rate). The assessor might have miscalculated the value by overestimating the size of your home, or he or she might have misjudged the number of bedrooms and amenities. In this circumstance, you have the option to hire an appraiser. The appraiser evaluates your home, and you can use his or her estimated value as part of your appeal.

     

    Which School Districts Have the Highest Rates?

    When deciding where to live, it’s important to consider property taxes, as they can add to your expenses considerably. In Central PA, here are the counties with the highest property taxes.

    Cumberland County

    Cumberland County is home to some of the lowest school and property taxes in the area. Real estate tax for this county is 2.195 mills, plus an additional tax of .166 mill for the county’s libraries. There are also taxes associated with various school districts and municipalities in the county, which would affect what you pay. The school districts with the highest taxes in Cumberland County include:

     

    • Camp Hill School District. For the 2017-2018 school year, the Camp Hill SD raised its tax rate by 2.9 percent. School district taxes on a house valued at $100,000 would be $1,593.67.
    • Mechanicsburg Area School District. Mechanicsburg Area SD also voted to increase its tax rate for the 2017-2018 school year, this time by 2 percent. The new rate is 13.056 mills, meaning that a homeowner with a house valued at $100,000 would pay $1305.60 in school district tax.
    • Big Spring School District. Big Spring School District decided to raise its tax rate by 2.5 percent for the 2017-2018 school year. The tax on a $100,000 property increased to $1,404.29.
    • Carlisle School District. To cover salary increases and pension costs, the Carlisle School District raised its rate by 2.9 percent for the 2017-2018 school year. The median home value in the school district is around $173,400. Under the new tax rate, a homeowner living in a house assessed at the median would pay $2,365 in school taxes annually.

     

    Dauphin County

    Dauphin County charges a mill rate of 6.876 and library mill rate of 0.35 in most boroughs or townships, as of July 2017. The millage rate for school districts varies considerably. Some of the districts with the highest mill rates include:

     

    • Harrisburg City. For the 2017-2018 school year, the millage rate for Harrisburg City SD is the highest in the county, at 27.8. A homeowner in a $100,000 house would pay $2,780 in school taxes alone.
    • Steelton-Highspire. The school tax for the Steelton-Highspire SD is slightly lower than Harrisburg’s, with a millage rate of 26.277. The tax on a $100,000 home would be $2627.70.
    • Middletown Area. The millage rate in the third most expensive school district is slightly lower than that of Harrisburg City or Steelton-Highspire. As of July 2017, Middletown Area SD has a mill rate of 22.15. That means a homeowner with a $100,000 house pays $2,215 per year in school taxes.

     

    Lancaster County

    For 2017-2018, the millage rate for Lancaster County is 3.735. The millage rate for the 17 districts found in Lancaster varies considerably. Some of the districts with the highest tax rates include:

     

    • Columbia Borough. Columbia Borough SD has, by far, the highest millage rate in Lancaster County. For the 2017-2018 school year, the rate is 30.1908. That means that a homeowner with a house assessed at $100,000 would pay $3,019 in school tax.
    • Lancaster. Lancaster SD also has a relatively high school tax, with a millage rate of 28.2568. Homeowners with properties valued at $100,000 pay $2,825.68 in tax.
    • Cocalico. The mill rate for Cocalico SD for the 2017-2018 school year is 23.16, which translates to a tax bill of $2,316 for a homeowner with a $100,000 property.
    • Donegal. Donegal SD has a mill rate of 22.879, so a homeowner with a $100,000 house pays $2,287.90 annually.

     

    York County

    York County has one of the highest property tax rates in Central PA (mill rate is 5.8). School tax in the area is also relatively high for several of York’s school districts.

    • York City. York City SD has the highest school tax, with a mill rate of 33.7361 for the 2017-2018 school year. If you own property valued at $100,000 in the SD, your annual school tax would be $3,373.
    • Northeastern. The school district with the second highest property tax in York County is Northeastern, which has a millage rate of 09 for the 2017-2018 school year. Taxes on a $100,000 house would be $2,609.
    • West York. The millage rate for the West York SD is 24.2238 for the 2017-2018 school year, which ends up being $2,422.38 in school taxes on a $100,000 home.
    • Dallastown. Dallastown SD’s millage rate is 23.66 for the 2017-2018 school year, which costs $2,366 in school tax for a homeowner with a $100,00 house.

     

    Which School Districts Have the Lowest Rates?

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    A select number of school districts have considerably lower tax rates. The following school districts are currently home to the lowest property taxes, outlined by county:

     

    Cumberland County

    • Cumberland Valley. Cumberland Valley SD raised its tax rate by 5 percent for the 2017-2018 school year. However, it still has the lowest tax rate in the county, with a millage rate of 9.516.
    • South Middleton. Residents in the South Middletown SD saw their school tax increase by 7.28 percent in 2017-2018. Despite the increase, this district still has one of the lowest taxes in Cumberland County, with a millage rate of 10.2484.

     

    Dauphin County

     

    Lancaster

    • Solanco. The school district with the lowest school tax in Lancaster County is Solanco, which has a millage rate of 8109 for the 2017-2018 school year. Townships in this district include Colerain, Bart and Eden.
    • Eastern Lancaster County. The school district with the second lowest tax rate in the county is Eastern Lancaster County, which has a millage rate of 15.3848.

     

    York

     

    Why Are There Variations?

    Several factors influence the rate charge for school tax by different districts. How much funding a district receives from non-local sources, such as the state or federal government, often affects the rate charged. For example, school districts in areas where there are higher rates of poverty typically receive higher amounts of state or federal aid. These school districts often receive lower amounts of local support.

    Other factors that affect property tax rates include the availability of other revenue-raising options in an area, the way the properties in an area are assessed and the amount (or lack) of commercial businesses in the area.

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    How Are Property Taxes Utilized?

    As you might guess from the discrepancy between county, and school district, millage rates, the majority of your property tax fund the public schools in your area.

    School district taxes typically fund teacher and administrator’s salaries, pension plans for district employees and supplies for classrooms. The taxes also pay for maintaining school buildings, and in cases where the buildings are in disrepair, they might pay for renovations or construction.

    School taxes can be a bit controversial in Central PA, as well as other counties in PA, since they can be high and often increase every year. There have been several efforts to eliminate school tax over the year, with the most recent attempt by the state senate in the summer of 2017. Lawmakers in favor of getting rid of school property tax hope to make up the difference by raising the state sales and income tax.

    A counterargument to the elimination of property tax focuses on school districts in debt. In these districts, a concern is that property tax could not be eliminated right away. The scenario in this circumstance means that affected taxpayers would continue to pay property tax, while also facing increased sales and income taxes.

    School district and property tax are just two things to consider when finding your new home in Central PA. For help finding a home that fits your budget, contact CENTURY 21 Core Partners today.

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