The Property Tax Appeal Process
On or before January 10th of the tax year, each assessor files their Tax List (real property, personal property & exempt property) with the County Tax Board, showing the assessed value of each property in their taxing district. Value is determined as of October 1st of the preceding year. A tax appeal must be filed with the County Board by April 1st. If there was a revaluation or reassessment program in your town, you have until May 1st to file.
Each year, by February 1st, assessors are required by law to mail every property owner a notice of their tax assessment. Usually the notice is a green and white postcard and gives you the assessed value for the land and improvements (the building) on the property, as it stood on October 1st of the prior year.
Every municipality has a sales ratio that is used to determine the market value of a piece of property. To determine your market value, you would take your assessment and divide it by your municipality’s ratio to get a true market value. This will give an indication if the property is properly assessed.
If you feel there may be a problem with your assessment, I can provide a quick analysis of the true market value based on your municipality’s sales ratio. If you feel that the true market value as established by your municipality tax assessor is inaccurate, I am happy to discuss the merits of filing a tax appeal with the County Tax Board.
A taxpayer considering an appeal should understand that they must prove their assessed value is unreasonable compared to a market value. By law, the assessment is assumed to be correct. You must overcome this presumption of correctness to get an assessment change. The burden of proof is on the taxpayer.
A tax appeal must be filed with the County Board by April 1st. If there was a revaluation or reassessment program in your town, you have until May 1st to file.
In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove an assessment does not fairly represent one of the two standards:
- Following a revaluation, all assessments must represent 100% of true market value as of the previous October 1. The October 1 pre-tax date is called the annual “assessment date”. All evidence submitted in a tax appeal must be on or near the assessment date, especially property sales used as comparables.
- The other standard is the “common level” or common level range established in your municipality.
To explain the common level range you must consider what happens following a revaluation or reassessment. Once a revaluation or reassessment is completed, external factors such as inflation, appreciation, and depreciation may cause values to increase or decrease at varying rates.
The New Jersey Legislature adopted a formula known as Chapter 123 in 1973 to test the fairness of an assessment. Once the Tax Board has determined the true market value of a property during an appeal, they are required to automatically compare the true market value to the assessment. If the ratio of the assessment to the true value exceeds the average ratio by 15%, then the assessment is automatically reduced to the common level. However, if the assessment falls within this common level range, no adjustment will be made. If the assessment to true value ratio falls below the common level, the Tax Board is obligated to increase the assessment to the common level. This test assumes the taxpayer will supply sufficient evidence to the Tax Board so they may determine the true market value of the property subject to the appeal.
The taxpayer must be persuasive and present credible evidence. Credible evidence is evidence supported by fact, not assumptions or beliefs. Photographs of both the subject property and comparables are useful in illustrating your argument. Factual evidence concerning special circumstances is necessary.
The most credible evidence is recent comparable sales of other properties of a similar type in your neighborhood. Remember, if you are going to discuss comparable sales, not less than three comparable sales must be submitted to the Assessor, Clerk and County Tax Board, not less than one week prior to your hearing. You should be knowledgeable of the conditions of the sales you cite including financing and be able to give a full description of the properties. Some of the characteristics making your property comparable are: recent sale price, similar square footage of living area measured from the outside, similar lot size or acreage, proximity to your property, the same zoning use (e.g. duplex in a duplex zone), and similar age and style of structure, etc. These comparable sales should be arms-length transactions. Do not use bank sales, divorce sales, estate sales, etc. These types of sales would typically bring a lower price than market value.
If you prefer, you may hire an “expert witness” or real estate appraiser to appraise your property. If you intend to rely on expert testimony at your tax appeal hearing, you must supply one copy of the appraisal report to the assessor, and one copy to every member of the County Tax Board and Tax Administrator at least 7 days in advance of the scheduled hearing. The appraiser who completed the report must be available at the hearing to give testimony and to afford the municipality and Tax Board an opportunity to question him as to how he arrived at his value. Filing an appeal costs between $5.00 and $150.00 depending on your assessment.
Tax appeal hearings usually start the end of April and continue until all are heard. If you are dissatisfied with the judgment rendered by the Tax Board, you will have 45 days from the date your judgment was mailed to file a further appeal with the Tax Court of New Jersey. If your property is assessed for more than $1,000,000, you may file directly with the Tax Court.
Everyone should take the time to go see his or her town assessor and look over his or her property record card. Make sure you are being properly assessed and paying only your fair share of taxes.