Appeals from the order of the Court of Common Pleas of Allegheny County, in case of Appeal of Anton W. Bigman and In-grid E. Bigman from action of the Board of Property Assessment, Appeals and Review of Allegheny County, Pennsylvania, on property situate in the City of Pittsburgh, Nos. G.D. 83-13509 and G.D. 83-13510.
D. R. Pellegrini, with him, Ira Weiss, Deputy County Solicitor, and James H. McLean, County Solicitor, for appellants.
Anton W. Bigman, for appellees.
Judges Rogers and Palladino, and Senior Judge Kalish, sitting as a panel of three. President Judge Crumlish, Jr., Judges MacPhail, Doyle, Colins and Palladino. Opinion by Judge Palladino. Judge Craig and Judge Barry did not participate in the decision in this case. Dissenting Opinion by President Judge Crumlish, Jr.
[ 110 Pa. Commw. Page 541]
The County of Allegheny (Appellant) appeals from a decision of the Court of Common Pleas of Allegheny County which held that condominiums and their included air rights are to be taxed as buildings and not as land.
The facts are not in dispute. Anton W. Bigman and In-grid E. Bigman (Taxpayers) own two condominiums in the city of Pittsburgh. The units are part of a nineteen story complex known as The Tower A Condominium at Chatham Center. The land which underlies the condominium is separately owned by another entity,*fn1 is assessed to the Prudential Insurance Company, and Prudential pays the taxes on the land at the millage rate applicable to land in the City of Pittsburgh.*fn2 As shall
[ 110 Pa. Commw. Page 542]
become clear, the millage rates in force in the City of Pittsburgh play an important role in the present case. In order to understand the reasons for this appeal, one must bear in mind that the City of Pittsburgh applies a much higher millage rate to land assessments than to building assessments, pursuant to the act of March 7, 1901, P.L. 20, art. VI, as amended, 53 P.S. § 25894 (hereinafter § 25894 of the Second Class City Act).*fn3
The horizontal split in ownership described above forms the foundation for the dispute in the present case. The parties stipulated at trial that only air rights were conveyed with the condominium units, and that no surface rights were transferred.*fn4 However, the parties
[ 110 Pa. Commw. Page 543]
disagree as to how the air rights are to be classified for taxation purposes.*fn5
Section 1 of the Act of June 15, 1939 (Second Class City Act), P.L. 346, as amended, 53 P.S. § 25891 mandates that county assessing authorities distinguish between buildings on land and the land exclusive of the
[ 110 Pa. Commw. Page 544]
buildings. Section 1 of the Second Class City Act further provides that the assessment made for county tax purposes shall be used to assess taxes in cities of the second class. (Pittsburgh is a city of the second class.) Thus, in the present case the taxing authority of Allegheny County was charged with determining whether the air rights owned by Taxpayers are to be classified as land or buildings. Allegheny County adopted the position that air rights are taxable as land and, therefore, assessed Taxpayers' units for both land and buildings.*fn6 On appeal, the Board of Property Assessment, Appeals and Review, sustained the assessment. Taxpayers appealed the Board's determination to the Court of Common Pleas. Wekselman, J., held that air rights are not properly taxable as land and entered non-jury decisions fixing the fair market value at the total assessed value, as to which there is no dispute, but allocating the entire assessment to buildings.*fn7
Appellant presents five issues on appeal. The majority of these issues revolve around the question of whether air rights are to be taxed as land or as buildings. Appellant argues: 1) that once air rights are occupied by a structure they become taxable as land; 2) that the presence or absence of a structure in the air space is immaterial; 3) that whether an entity other than the unit owner [the owner of the air rights] pays or will be paying
[ 110 Pa. Commw. Page 545]
tax on the land under the condominium is also immaterial; and 4) that the method for assessing the valuation of air rights is proper and legal.*fn8 We will specifically address these issues, but first must determine how air rights are to be classified for assessment purposes. For the reasons set forth below, we affirm the decision of the lower court and hold that air rights are to be assessed as buildings and not as land.
Our analysis begins with examination of Chapter 19 of Title 68 -- Air Space -- Estates, Rights and Interests, 68 Pa. C.S. §§ 801-803. These sections set forth the framework for treatment of air rights. Section 801 provides that air rights may be validly conveyed and transferred to one other than the owner(s) of the surface below. Thus, § 801 specifically authorizes the sort of horizontal split in ownership present in this case.
Section 802 provides, inter alia, that "[e]states, rights and interests in air space above the surface of the ground" are to be "dealt with for all purposes and in all respects as estates, rights and ...