In re: Appeal of Levin ~ From a decision of the Bd. of Rev. of Taxes ~ Appeal of: City of Philadelphia

CourtCommonwealth Court of Pennsylvania
DecidedJuly 22, 2025
Docket17 & 18 C.D. 2023
StatusUnpublished

This text of In re: Appeal of Levin ~ From a decision of the Bd. of Rev. of Taxes ~ Appeal of: City of Philadelphia (In re: Appeal of Levin ~ From a decision of the Bd. of Rev. of Taxes ~ Appeal of: City of Philadelphia) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Appeal of Levin ~ From a decision of the Bd. of Rev. of Taxes ~ Appeal of: City of Philadelphia, (Pa. Ct. App. 2025).

Opinion

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

In re: Appeal of Levin : CASES CONSOLIDATED : No. 17 C.D. 2023 From a decision of the Board of : Revision of Taxes : : Appeal of: City of Philadelphia : : In re: Appeal of Linehan : No. 18 C.D. 2023 : Argued: March 4, 2025 From a decision of the Board of : Revision of Taxes : : Appeal of: City of Philadelphia :

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY SENIOR JUDGE LEAVITT FILED: July 22, 2025

The City of Philadelphia (City) appeals two orders of the Philadelphia County Court of Common Pleas (trial court), which sustained the tax assessment appeals filed by Timothy and Alexandra Levin (Levins) and Charles and Molly Linehan (Linehans) (collectively, Taxpayers). Because of the City’s tax abatement of the improvement made to each lot by Taxpayers, their tax burden was based upon the assessed value of the land. Crediting the opinion of Taxpayers’ expert, the trial court reduced the land assessment for each lot for tax years 2018 to 2021. On appeal, the City argues the trial court erred in calculating the market value of Taxpayers’ properties by adding the land assessment offered by Taxpayers’ expert to the City’s assessment of the improvement on each property. Additionally, the City argues that the trial court erred in accepting the methodology used by Taxpayers’ expert to demonstrate a violation of the Uniformity Clause of the Pennsylvania Constitution.1 For the reasons to follow, we vacate and remand for further findings. Background In 2014, the Levins purchased a vacant lot at 415 W. Moreland Avenue for $400,000, and the Linehans purchased the adjoining vacant lot at 411 W. Moreland Avenue for $400,000. Thereafter, Taxpayers each constructed a single- family colonial style home on their respective lots. Taxpayers each received a 10- year tax exemption on the improvements to their lots, i.e., their new homes. As of 2017, each lot had an assessed land value of $215,000. In 2018, the City’s Office of Property Assessment (Assessment Office) tripled the assessed land value for both lots. The Assessment Office assessed the Levins’ property at $2,500,000, of which $725,000 was for the land and $1,775,000 was for the improvement. It assessed the Linehans’ property at $2,414,900, of which $700,321 was for the land and $1,714,579 was for the improvement. Taxpayers appealed the 2018 assessments, and the City’s Board of Revision of Taxes (Tax Board) revised the assessments. The Tax Board reduced the Levins’ total assessment to $2,110,000, which included a land value of $611,900 and an exempt improvement value of $1,498,100. Notes of Testimony, 9/21/2020, at 8 (N.T. __); Reproduced Record at 48a (R.R. __). The Tax Board reduced the Linehans’ total assessment to $2,090,000, which included a land value of $606,100 and an exempt improvement value of $1,483,900. Id. Taxpayers appealed to the trial court. They argued that the Tax Board overstated the land value portion of their assessments, which defeated the purpose

1 PA. CONST. art. VIII, §1. 2 of the 10-year tax abatement on their improvements. This overstatement violated the Uniformity Clause. Under the Philadelphia Code, the real estate tax on Landowners’ lots is determined by application of the tax rate to the land value portion of their assessment. PHILA. CODE §§19-1301 (setting forth the tax rate to be levied on “the assessed value of taxable real property”), 19-1303.4(6)(d) (Tax Board to separately assess the dwelling unit and the land to determine the assessment valuation attributable to the cost of construction of the new dwelling unit). On September 21, 2020, the trial court conducted a hearing. Taxpayers presented the testimony of Joseph Benincasa, a certified real estate appraiser with 48 years of experience, who was qualified as an expert. Benincasa testified that the two lots involved are each improved with a single-family colonial home and have a fair market value of over $2,000,000. Each lot is level and has access to public water, sewer, gas and electric. Each lot is 24,625 square feet in size and located in the Chestnut Hill area of the City. Benincasa opined on the land value portion of the assessment for each lot. Benincasa explained that there are three approaches to value real property: counter-cost method; income approach; and sales comparison approach. Benincasa did not use the “counter-cost method” of valuation, which considers replacement cost of the property, less depreciation and obsolescence, and is used to assess structures. As such, it was irrelevant to his determination of “the assessments for the land.” N.T. 14-15; R.R. 50a. Likewise, the “income approach”2 was not relevant because the land did not generate income. N.T. 14-15; R.R. 50a. Benincasa used only the sales comparison approach, which compares the subject property to

2 The income approach determines fair market value by dividing the subject property’s annual net rental income by an investment rate of return. Jackson v. Board of Assessment Appeals of Cumberland County, 950 A.2d 1081, 1084 n.1 (Pa. Cmwlth. 2008). 3 similar properties, with consideration given to size, age, physical condition, location and other factors. Benincasa next explained that he identified five recent sales of City properties that were similar to those owned by Taxpayers. The first property, 607 St. Andrews Road, sold for $2,875,000 in January of 2017. The property consisted of a 4-year-old, 4,500-square-foot custom colonial house on a 43,565-square-foot lot. In 2018, the Assessment Office assessed the land’s value at $600,000, or $13.77 per square foot. The second property, 3 Valley View Road, sold for $1,840,000 in January of 2017. The property consisted of a 9-year-old colonial house on a 28,370- square-foot lot. In 2018, the Assessment Office assessed the land at $233,100, or $8.21 per square foot. The third property, 17 Summit Street, sold for $1,875,000 in June of 2017. The property consisted of a 167-year-old, 5,030-square-foot colonial house. In 2018, the Assessment Office assessed the land at $178,440, or $10.51 per square foot. The fourth property, 8016 Seminole Street, sold in June of 2017 for $1,840,000. The property consisted of a 90-year-old, 5,070-square-foot colonial house on a 24,200 square-foot lot. In 2018, the Assessment Office assessed the land at $197,500, or $8.16 per square foot. Finally, the fifth property, 200 White Marsh Avenue, sold for $1,233,094 in October of 2017. The property consisted of an 84- year-old colonial house. In 2018, the Assessment Office assessed the land at $319,980, or $9.14 per square foot. Benincasa testified that he made adjustments to the comparable properties to account for differences in location, lot sizes, and the availability of public utilities. He adjusted properties two and five because they were served by septic tanks, not public sewer. He adjusted properties one and five to account for the size of the lots. After these adjustments, he determined that the average land

4 value for the five comparable properties was $11.66 per square foot. N.T. 20; R.R. 51a. Benincasa fixed upon an assessment land value of $12.18 per square foot for the two lots owned by Taxpayers, which was higher than that used by the Assessment Office for four of the comparable sales. For Taxpayers, the Assessment Office set a land value at 411 W. Moreland Avenue at $24.61 per square foot, and it set a land value of $24.84 per square foot at 415 W. Moreland Avenue. Using his value of $12.18 per square foot, Benincasa opined that the assessment land value on each of the two involved lots was $300,000 for tax year 2018.

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In re: Appeal of Levin ~ From a decision of the Bd. of Rev. of Taxes ~ Appeal of: City of Philadelphia, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-appeal-of-levin-from-a-decision-of-the-bd-of-rev-of-taxes-pacommwct-2025.