Basics of Tax Appeals in New Jersey

As real estate taxes skyrocket, many taxpayers have begun to look for ways to reduce their tax payments. One common method of accomplishing this is filing a tax appeal. However, since tax appeal procedure affords relief to very few taxpayers, the decision of whether to file an appeal will require a cursory understanding of how the process works.

Most real estate taxes are ad valorem – taxes based upon the assessed value of a person’s property. However, it is important to note that the municipality’s assessment of a property is typically much lower than the property’s actual value. This is in part due to the fact that municipalities infrequently conduct revaluations. Municipalities will therefore operate under the assumption that all properties are under assessed by the same ratio and will increase their tax rate accordingly. Your real estate tax bill is calculated by multiplying your assessment by the municipality’s tax rate. While a municipality’s tax rate is virtually incapable of challenge, your real estate assessment is. Some property owners who seek relief can demonstrate that their assessment, while not higher than the actual property value, is discriminatory in its application and is not even-handedly applied to other residents. This is a common situation; however, appeals made on this basis are relatively difficult to win, primarily because these appeals require that the property owner furnish evidence that his assessment exceeds the average ratio by 15%. Therefore, it is much easier to win an appeal upon a showing that the appellant’s property is over-assessed. Over-assessment is most likely to occur in a municipality that has either been recently revalued or has a high county equalization ratio (the ratio of assessed value to actual value). The tax appeal procedure begins with an application which is due on April 1st. Filing fees for the application range between $5 and $150 depending upon the assessed value of the property. Owners of rental property should keep in mind that in addition to an appraisal, the appeal should be supported by a statement of income and expenses. Usually the municipality will require the filing of this statement several months before the tax appeal deadline. In addition, while property owners may represent themselves in the tax appeal proceeding, the applicant must have an appraiser at the hearing in all cases where an appraisal will be offered as evidence. Our firm represents clients throughout New Jersey, very often on a contingency basis. While the new assessment is guaranteed for a minimum of three years, it is unlikely to change for several years until the next municipal revaluation. Because the amount of real estate tax that you pay is a function of your property value, it is essential that you file a tax appeal if you think the municipality has over-valued your property.

Michael Mirne, Esq., a sole practitioner, has an extensive real estate background and is also certified and licensed as a Tax Assessor in the State of New Jersey. Mr. Mirne received his B.S. Degree from Syracuse University and his J.D. from Seton Hall University. He is currently licensed to practice law in New Jersey as well as all Federal Courts.

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