Common Level Ratio Pennsylvania: How to Value Real Estate for Inheritance Tax

When someone dies owning real estate in Pennsylvania, the executor must report that property's fair market value as of the date of death on the inheritance tax return (Form REV-1500). The problem: getting that number is harder than it sounds, especially if the family intends to keep the property rather than sell it.

There are two ways to establish the value without a sale: a formal retroactive appraisal (expensive) or the Common Level Ratio (CLR) method (free, but requires understanding how it works). The CLR approach is widely accepted by the Pennsylvania Department of Revenue and is how most executors handle it.

What the Common Level Ratio Is

Pennsylvania counties assess real estate for property tax purposes using a base year — a historical year when assessments were last brought in line with actual market values. Some counties run recent base years. Others do not. Allegheny County, for instance, still uses 2012 as its base year, meaning assessed values significantly understate current market values.

The State Tax Equalization Board (STEB) publishes the Common Level Ratio each year — a factor that mathematically adjusts the county's assessed value back to an estimated current fair market value. The CLR is the ratio of assessed value to fair market value in a given county.

To use the CLR for inheritance tax purposes, you apply the CLR reciprocal (also called the conversion factor), which converts the assessed value to estimated fair market value:

Estimated Fair Market Value = Assessed Value ÷ CLR

Or equivalently: Assessed Value × (1 / CLR)

Where to Find the CLR and Assessed Value

CLR by county: Published annually by the State Tax Equalization Board at www.steb.pa.gov. Look for the most recent certified ratio table. Use the CLR for the county where the property is located, for the year in which the decedent died.

Assessed value: Found on the county tax assessment records. Search the county's property assessment office website or the county government's real estate portal. The assessed value is not the same as the appraised value, the market value, or the tax bill amount — it is the official county-assigned base-year value used to calculate property taxes.

Worked Example

Say the decedent died owning a house in Allegheny County. The county's assessed value (from their property records) is $180,000. The STEB's certified CLR for Allegheny County for the year of death is 0.87.

Estimated fair market value = $180,000 ÷ 0.87 = $206,897

That $206,897 is the figure you would report on Schedule A of the REV-1500 as the date-of-death value of the property.

If the CLR for a different county is 0.50 (meaning assessed values are roughly half of market values), then a $150,000 assessed value translates to a $300,000 estimated fair market value.

Why the CLR Varies So Much by County

County assessment practices in Pennsylvania are decentralized and updated infrequently. A county that conducted a reassessment in 2022 will have a CLR close to 1.0 — assessed values closely match market values. A county that has not reassessed since 2000 will have a CLR significantly below 1.0, and the reciprocal multiplier will be large.

This variation matters because using the wrong CLR — or using the correct CLR for the wrong year — can meaningfully misstate the estate's real estate value, affecting both the inheritance tax owed and the risk of an audit by the Department of Revenue.

Always confirm:

1. You are using the CLR for the correct county (where the property is located, not where the decedent lived)
2. You are using the CLR for the correct assessment year (the year of death, not the current year)

When to Skip the CLR and Get an Appraisal Instead

The CLR method is an estimate. In most cases it is acceptable to the Department of Revenue, but there are situations where a formal appraisal is the better choice:

Property sold within 15 months of death: If the property is sold to an unrelated third party at arm's length within 15 months of the date of death, use the gross sale price as the value. No CLR calculation needed.

Highly unusual properties: Specialty commercial real estate, historic properties, properties with significant deferred maintenance, or properties with unusual features may have assessed values that diverge substantially from true market value in ways the CLR does not capture. An appraiser's opinion carries more weight in an audit.

Disputes among heirs: If beneficiaries are disagreeing about property values — particularly where one heir wants to buy out others — a formal appraisal provides an independent, defensible figure.

High-value estates with tax at stake: When the property is worth $800,000 and the tax rate is 4.5% (on transfers to children), the difference between a CLR-estimated value and a formal appraisal value could mean thousands of dollars of tax either way. In those cases, a $400–$600 appraisal is worth the certainty.

The CLR and the 5% Early-Payment Discount

The three-month window for the 5% early-payment discount creates pressure to value real estate quickly. If the property has not sold and you are using the CLR method, the calculation is fast — look up the assessed value and apply the ratio.

If you are waiting for a formal appraisal and the appraiser needs 30–60 days, you may miss the three-month window unless you act early. One approach: use the CLR estimate to make the early payment at nine months, then update the return with the appraisal value when you file the full REV-1500. Just be aware that if the appraisal comes in lower than the CLR estimate, the overpayment discount strategy described in the inheritance tax filing guide becomes relevant.

What About Pennsylvania's Lack of TOD Deeds

Unlike many other states, Pennsylvania does not recognize Transfer-on-Death (TOD) deeds for real estate. There is no mechanism in Pennsylvania to pre-designate a real estate beneficiary on a deed that transfers outside of probate.

This means virtually all solely owned real estate in Pennsylvania passes through the estate — either via formal probate or, if small enough, through a small estate petition. The inheritance tax lien attaches to the property immediately at death and must be released by the Department of Revenue before any title company will allow a sale or transfer. That tax release, issued after the REV-1500 is filed and paid, is what clears the chain of title.

Interaction with County Recorder of Deeds

Once the tax is paid and released, transferring real estate to an heir requires recording a new deed with the county Recorder of Deeds. The executor signs an executor's deed conveying the property to the heir(s). Recording fees vary by county — roughly $71 to $183 for a standard four-page deed, depending on the county.

The deed must recite that the inheritance tax has been paid (or is not due), typically by including the tax release number issued by the Department of Revenue. Title companies and future buyers will look for this recital as confirmation the property is free of the inheritance tax lien.

Working through the CLR calculation, filing the REV-1500, and coordinating the tax release are all steps covered in detail in the Pennsylvania Estate Settlement Guide. If you are administering an estate with real estate, that sequence matters — getting the valuation right at the beginning prevents complications when you are ready to transfer or sell the property.

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