Even before you receive your yearly tax notice from your county, you should begin the process of trying to lower your property tax bill. New Jersey has one of the highest property taxes, ranking 4th in the nation. However, there are different ways you might be able to reduce your NJ property taxes.
What is Property Tax?
Real estate property tax is assessed based on two factors, the location of the property and how much the improvements (house, outbuildings, etc.) are worth.
How is Property Tax Calculated In NJ?
The property tax is determined by multiplying the assessed value of the property by the municipal tax rate (property tax= value of the property multiplied by the tax rate.)
How to Reduce Your Property Taxes
Here is a step by step process for understanding how to save on your property taxes.
Request Your Property Tax Card
Your property tax card is located in the town hall. You can request a copy of your property tax cards from your local tax assessor’s office. The property tax card provides the homeowner with information the town has gathered about the property over a specific period. The card includes the lot size, dimensions of the rooms, and any other improvements made to the structure.
Review the Tax Card
Review the information on the card carefully and note any discrepancies and raise these issues with the tax assessor. They will either adjust immediately or conduct a re-evaluation of the property.
Walk the Home with the Assessor
Walk through the home with the tax assessor during the evaluation process. Make sure to point out the properties good and bad for the fairest possible valuation for your home.
Keep in mind that you do not have to allow the tax assessor into your home. However, if you do not permit access to the interior, an assessor assumes you’ve made improvements, and this could automatically result in a bigger tax bill.
Limit Curb Appeal
Tax assessors follow a set of guidelines during the evaluation process. However, less physically appealing homes are assessed lower than well maintained and manicured homes. Resist the desire to groom your property before an assessment.
How to Challenge Your Property Tax Assessment
Your local taxing authority, which could be your county, city, or town, typically determines the tax rate. You cannot do anything regarding the tax rate; however, you can contest your property’s assessed value.
A tax assessor looks at comparable homes in the area that have sold recently and estimates your home’s market value. Here is where there is some wiggle room for accuracy. Make sure everything recorded regarding your property is accurate.
Appeal if your assessment is wrong
There is always a debate about market value. Many factors reduce a home’s worth. If you don’t agree with your home’s assessment, you have a right to appeal.
If you do decide to appeal, keep in mind that you need to do some research about other homes in the area. That means matching the number of bedrooms, baths, square footage, and other amenities to other homes in the area. That will help you discover tax assessments on similar homes and possibly lower your assessed value, which is the first step in reducing your tax bill.
Based on the NJ Division of Taxation, a tax-paying property owner considering a tax appeal should understand that he/she must prove that their assessed value is unreasonable based on comparison to a market value standard.
Other ways to save on your Property Taxes
Don’t Make any structural changes
Any changes to your home’s structure or interior may increase your tax bill. Any permanent change, including a deck, pool, or even a large shed added to your home, is presumed to increase its value. Also, keep in mind that any improvements inside such as new countertops will be considered a physical improvement.
Research how much the tax increase will be before you decide on construction. You can start by calling the local building and tax departments and get a ballpark estimate.
Explore And Apply for NJ Exemptions
Exemptions are applied for certain qualified people within specific categories. Some states and municipalities provide exemptions to lower the tax burden for:
- People with disabilities
- Properties used for Agriculture purposes
Your taxing authority can provide specific exemption qualifications.
Consider Consulting A Property Tax Appeal Lawyer
Challenging your property tax assessment is not an easy process. A taxpayer considering an appeal should understand that he/she must prove that his/her assessed value is unreasonable compared to a market value standard. By law, the assumption is that your current assessment is correct. You must overcome this presumption of correctness to obtain an assessment change.
There are many different tax appeals deadlines as well as requirements, local processes, and other pertinent information that you should be aware of before appealing.
The best way to fight a tax rate assessment and to fully understand the process is to discuss your options with an experienced real estate property tax attorney. An attorney can help you understand your tax bill and discuss options on how you can save and assist you in the assessment appeal if you feel it is wrong.