Property Tax Appeals

New Jersey has one of the highest property tax rates in the nation.  The taxes a homeowner pays are based on the assessed value of their property.  When the equalized assessment is higher than the fair market value of the property, the owner is paying too much in taxes.  Since the start of the “Great Recession,” most properties in New Jersey have decreased in value, meaning many properties have grounds for a successful appeal.

Our attorneys pursue property tax appeals for property owners whose taxes are too high because their assessments are inflated.  These appeals can save an owner thousands of dollars per year.

It is also important to remember that these savings continue.  A successful appeal will create savings until the next town-wide assessment, which is supposed to occur every ten years but often takes much longer.  On the other hand, failing to file the appeal will mean you will be stuck paying extra taxes you shouldn’t really owe for many years.  Thus, an over-assessment will compound several thousand dollars for one year into many thousands of dollars until the next assessment.

Basis for a Property Tax Appeal

If you are taxes are too high, you can do nothing and pay the taxes you don’t have to, or you can appeal.  You cannot appeal the tax rate, which is set between your county, town and school district; properties are taxed at the same rate across the town.  

However, you can appeal the assessment.  If your property is assessed too high, you are paying too much, because the town-wide tax rate is multiplied by the assessed value of your property.  The higher the assessment, the higher your taxes.  If the equalized assessment is more than fifteen per cent higher than the fair market value (or higher at all after a town-wide revaluation), taking into account the equalization ratio, you can successfully appeal.  

You may also be able to appeal if the structures (“improvements”) to the property are damaged or if you cannot obtain a certificate of occupancy.

Who Can Appeal

Property owners can appeal.  A tenant required to pay taxes as part of rent can appeal.  Likewise, tax sale certificate and mortgage holders can sometimes also appeal.  Others may be entitled to a reduction of their taxes, such as seniors, veterans and charitable organizations.

The Equalization Ratio and the Tax Rate

New Jersey law requires that assessments must be within fifteen percent of the true fair market value of the property as of October of the previous year.  So, for example, the assessment for 2013 taxes must equal the property’s fair market value as of October 2012.

However, the assessments which you see on the assessment notices sent by the town are not necessarily the fair market value.  The assessment was made at the time of the last town-wide assessment, which could have been years ago.  Therefore, each year the “equalization ratio,” or “Chapter 123 ratio,” changes.  The equalization ration is applied to the assessment to determine if it reflects fair market value.  This takes into account the town-wide changes in property values since the last town-wide revaluation.

For example, if a home was assessed at $500,000 in 2000, and in 2010 the town’s equalization ratio is 150%, then the actual assessed value of the home is $750,000.  However, if the recession caused the home to drop in value to $500,000, the home is overvalued by more than fifteen per cent.  The assessment will be reduced by one-third, and so will the taxes.

Deadlines to File New Jersey Property Tax Appeals

The deadline to file an appeal is April 1st (when there is a town-wide valuation, this may be extended to May 1st, but don’t wait to find out).  If you miss the deadline, you lose your right to appeal.

What You Need to Win a New Jersey Property Tax Appeal

You need evidence to prove that your property is overvalued.  Normally you will need an assessor to prove this.  However, you don’t need to pay for an appraisal to get a good idea about the true value of your home.  You can check many free websites to view local sales.      

How We Can Help

We first will review the information you have about the true market value of your property and determine if it is worth pursuing an appeal.  If it is, we will work closely with you and an appraiser to establish proof that your property was overvalued.  We will then file the appeal on your behalf, represent you at the County Tax Board or Tax Court as appropriate, negotiate with the taxing authorities, and present your case.

Contact Us

The complexities of New Jersey property tax appeals make it important to have an experienced attorney at your side.  Please e-mail us or call (973) 890-0004 to set up an appointment to discuss your property tax appeal.

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