Property Tax Appeals for Condominiums
In many ways, appeals for the property tax assessments on condominiums are much the same as other property appeals under New Jersey property tax law. In New Jersey, the overall tax cannot be appealed per se, nor can the municipal tax rate. However, the assessment of the property is value on which the tax is based can be appealed.
All real estate in New Jersey must be taxed based on its fair market value. The assessment must reflect the property’s fair market value. This does not mean that when you see your tax bill it will show you what the market value of your house is. Town-wide valuations are normally held about once every ten years. At that point, the property will be assessed and must reflect fair market value. However, that is the assessment which will remain until the next assessment even though property values may go up or down. New Jersey tax law therefore requires that an “equalization ratio” (or “Chapter 123 ratio”) must be applied to the assessment. If the town-wide property values have gone up by 50 percent, the assessment will be multiplied by an equalization ratio of 150 percent. If they have gone down by 50 percent, they will be multiplied by an equalization ratio of 50 percent. The result of the assessment multiplied by the equalization ratio must equal fair market value. If it exceeds the fair market value by at least 15 percent, you can successfully appeal your property taxes.
So, as an example, if a condo had an assessed value of $100,000 in a town with an equalization ratio of 200 percent, the actual assessed value is $200,000 ($100,000 x 200 %). So if the fair market value of the condo is only $150,000, that is more than 15 percent below the actual value of the assessment after applying the equalization ratio, so an appeal should succeed. However, if the fair market value of the condo was $190,000, that would be only 5 percent below the actual value of the assessment after applying the equalization ratio, so an appeal would be unsuccessful.
In a condominium development there are unique variables which may affect your valuation. For instance, if one unit has significant improvements, the assessor might be using that one as the basis for the unimproved units, causing them to be significantly over-assessed. Likewise, if one unit is assessed at too high a value, then all the units may be assessed too high. As seen in these examples, there may be widespread inflated assessments. In this case, we can represent all or many of the owners, thus having less work on appraisals, and gaining the advantages economies of scale.
Our attorneys are experienced in using New Jersey property tax law to your advantage. We have helped many real estate property owners successfully appeal their assessments and significantly lower their property tax bill. To find out more about appealing the property taxes on your condominium, please e-mail us or call us at (973) 890-0004. We can help.