It is well known that New Jersey has the highest real-estate taxes in the nation, but there is a way to reduce them. If the value of your property is over assessed, you may be eligible for a real-estate tax reduction.
Basic knowledge of the steps involved in the process can save you thousands of dollars each year, making your property more affordable and also more attractive to prospective buyers.
The heart of the matter is that you must be able to prove that your home’s current assessment is at least 15% greater than its market value. To make your case you must compile market data of similar properties, in similar neighborhoods, of similar size and preferably style, that have sold for a lower price than your subject property. The properties offered for comparison must have been sold or closed on by October 1st of the previous year. For 2012 that is October 1, 2011. The data should also be fairly recent, within a year is best.
Beyond comparable data, cross check the assessor’s card with your property to look for mistakes. I have found that the tax office has many properties listed with more land than they actually have, due to an irregular sized lot, and the calculations for square footage are incorrect. Look to your own property for elements that are dated, obsolete or in disrepair (it makes sense to attach photographs to your application). The more evidence you submit to support your appeal the better.
You may also want to hire a professional appraiser who can both provide and/or support your comparables and testify at an appeal hearing if necessary. Real-estate Brokers may be able to supply comparable sales data (I am a member of the local Multiple Listing Service so I have access to all of that data) but a professional appraisal will always carry more weight with the appeal board, should your case go there.
Every appeal must be filed in three places: the municipality’s assessor, the town clerk’s office and the county tax board. The filing with the county tax board must also include certification that the petition has been previously filed with both the municipality’s assessor and the town clerk. The filing deadline is April 1st of the year under appeal. For an appeal in 2012 that would be April 1, 2013.
Because there can be thousands of appeals filed in a single county or community it is always best to file in person. This, along with every other step in the sometimes complicated appeal process, can be handled by an experienced tax professional who will personally guide your appeal through the system and will generally know whether your real estate qualifies for a tax reduction.
Beware that a town may file a counter-claim, though rare, which may result in higher taxes, especially if there has been substantial work done without a permit. YES, the township can actually RAISE your taxes! In addition, if you or the previous owner did work on the house and forgot to close out your building permits, this could complicate your appeal. The municipality can first force you to close out those permits, and if there are problems, this could either delay your appeal or disqualify your application (if permits cannot be closed in time for the April 1st filing deadline).
Finally, beware of certain myths. There are rumors that a home assessed for under $1 million is not eligible for an appeal, FALSE. Also, avoid advice from non-professionals as it is often misleading.
Though time consuming, a tax appeal may be a good way to reduce your overhead by thousands of dollars a year. Ask yourself this question: “Is my tax assessment lower than I would expect to ask for my home if I listed it for sale?” If the answer is yes, it may be hard to convince the tax assessor that you are assessed too high.
Mark D.Bigos is an attorney and a member of both the New Jersey and New York State Bar Associations. He is also a Broker with Towne Realty Group in Short Hills, NJ, specializing incommercial real estate and tax appeals. Feel free to contact him at email@example.com or on cell at 908.531.4242. In dozens of tax appeals in the last few years, he has not lost.
You can read more about Towne Realty Group and tax appeals in our magazine. InTowneMagazine