The 2011 New Jersey Tax Assessment Appeal Season ends soon..

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Do you believe your property taxes are too high?  Or put another way, is the tax assessment on your home incorrect? 

Inaccurate residential assessments are a growing challenge in our area.  To put it simply, a tax assessment is based on the county's estimate of the value of your home.  When the assessment is incorrectly calculated or does not represent your home's current value, the resulting tax bill creates an unfair obligation for you

What's the best way to prove that your home is over assessed?  Obtain an appraisal from an appraiser experienced and qualified to perform tax assessment appeal appraisals.  Call the tax assessment appeal experts at Appraisal Trend LLC™.  We understand the Tax Assessment appeal process in the state of New Jersey and are ready to assist you.  Call or email us now!

856-282-1110

When can you appeal your assessment?

In New Jersey, the Tax assessment appeal season begins on October 1st of each year and ends on April, 1st of the following year.  In the case of a township wide re-assessment, the deadline is sometimes extended (contact your township for more specific information).

Here's a little known piece of information... although you generally have until April 1st of each year to file your appeal, your best chance to win generally occurs during the period from October 1st through the end of November.  Call us and we'll tell you why.

If my neighbor has a much lower assessment that I do, does that mean I am over assessed?

The answer is...not necessarily.  Your neighbor may be under or over assessed.  The real question is whether your property is properly assessed?   In other words, does your assessment truly represent market value? To answer that question it is important to understand the relationship between assessed value and market value.  The following information answers this question and many others... 

Though the process is generally called a "Tax Appeal", in fact you are not actually appealing your property taxes.  Rather you are appealing the assessment that was placed on your property by the tax assessor in your municipality. 

There are two scenarios to choose from when appealing your assessment. 

1.  The first year following a municipality wide revaluation

2.  In all years thereafter

In the first year following a municipality wide revaluation, the assessment on your property represents 100% of the market value of your property as of October 1st.  Thus, the assessor must be 100% accurate during the first year.   When this scenario occurs, you have a distinct advantage.

In all years thereafter, the assessor has a 15% margin for error and is presumed to be correct as long as he/she is within that 15% range.  The 15% margin of error however, is constantly modified (over time) by what's called the Director's ratio.  The following formulas will help you to estimate what the "Maximum Appraised Value" on your property would need to be in order to potentially "Win"

First Formula: Your properties Total Assessment (from your tax bill) divided by the Average Ratio for your municipality for the year in question equals the "Actual Market Value" your assessment represents.  This is what the Assessor believes the Market Value of your property is equal to. 

Second Formula:  Your properties "Total Assessment" (from your tax bill) divided by the "Upper Limit" of Value Ratio (as published by the state of New Jersey) equals the maximum Market Value.  In other words, if the Actual Market Value of your property is less than this number, you have a reasonable chance to win a tax appeal. 

EXAMPLE

Lets say that you live Cherry Hill (Camden County), and your property tax assessment is $200,000, here's how we would apply the above formulas.

First Formula:  $200,000 divided by the Cherry Hill "Average Ratio" of .4694 = $426,000 (approx).  Thus, $426,000 is the market value that your assessment represents.

Second Formula:  $200,000 divided by the Cherry Hill "Upper Limit" of Value ratio of .5398 = $371,000 (approx).  Thus, if the actual market value of the property is less than this number, there is a reasonable chance to win the tax appeal. 

Be aware however, that appeals go both ways.  Should the home be under assessed, a property tax increase could occur.  Using the example of a home with a property tax assessment of $200,000.    $200,000 divided by the "Lower Limit" of Value ratio of .3990 = $501,000 (approx).  Thus, if the actual market value of the property is greater than this number, there is a reasonable chance that the tax assessment would be increased. 

Please note; though we used Cherry Hill as an example, Appraisal Trends, LLC also completes property tax assessment appeal appraisals in Voorhees, Mt. Laurel, Haddonfield, Moorestown, Marlton, Turnersville, Medford, Medford Lakes as well as many other communities in South Jersey.

To obtain a copy of the published ratios... called "Common Level Ranges (Chapter 123)", please call the state of New Jersey Local Property Branch at (609)292-7929 or click on the link below, then select your county (for 2011).  Alternatively, simply call us and we would be happy to assist you with the calculation.  There is no charge for this service. 

Common Level Ranges (Chapter 123)

The following questions and answers were developed by the state of New Jersey to assist homeowners in properly preparing for a tax appeal hearing.  The appeal process is complex.  This information was derived from the New Jersey laws which govern tax appeals: Administrative Code Title 18:12 and New Jersey Statutes Title 54:3 et seq and 54:3 et seq. as an aid to the property owner, but it should not be considered as an all-inclusive guide.  Most importantly, it is essential that taxpayers understand and must prove an assessment is unreasonable, compared to a market standard.  Also, note that any information herein should not be considered legal advice.  Please consider consulting an attorney.

In New Jersey, current assessments are by law assumed to be correct.  The homeowner must overcome this presumption of correctness to gain an assessment reduction.  

What is the basis for my assessment?

In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove that an assessment does not fairly represent one of two standards:

1. All assessments must represent 100% of true market value as of the previous October 1 , in a year following a revaluation or reassessment.  The October 1 pretax date is called the annual "assessment date."

2. In a non revaluation or non reassessment year, the assessment must exceed the common level range determined for your municipality.

To understand the common level range you must consider what happens following a revaluation.  Once a revaluation is completed, factors such as inflation, appreciation, and depreciation cause property values to increase or decrease at varying rates.  Other factors may also contribute to changes in property values. Obviously, if assessments are not adjusted annually, a deviation from 100% of true market value may occur.

The New Jersey State Division of Taxation, with the assistance of local assessors, annually conducts a fiscal year sales survey, investigating property transfers that occurred in your community.

This sales data is compared individually to corresponding assessments to determine an average level of assessment in a municipality.  An average ratio, sometimes referred to as the Director's ratio, is developed to represent the assessment level in every community.

In any year, except the year in which a revaluation or reassessment is implemented, the common level of assessment is the average ratio of the district in which your property is situated, and is used by the Tax Board to determine the fairness of your assessment.

How do I know if my assessment is fair?

In 1973, the New Jersey Legislature adopted a formula known as Chapter 123 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 use this formula and automatically compare the true market value to the assessment.

If the ratio of the assessment to true value exceeds the average ratio by 15%, then the assessment is automatically reduced to the common level.

However, if the assessment falls within a common level range, + or - 15%, of the average ratio, no adjustment will be made.

If the assessment to true value ratio falls below the common level range, the Tax Board may increase the assessment to the common level.

This test can only be conducted when the taxpayer supplies sufficient evidence to enable the County Board of Taxation to determine the true market value of the property subject to the appeal.

You should inquire into your district's average ratio before filing a tax appeal. This ratio changes annually on October 1, for use in the subsequent tax year.

What is a tax appeal hearing and who will hear my appeal?

A tax appeal hearing is a public meeting presided over by a tax commissioner or commissioners.  The county Tax Board Commissioners are appointed primarily to hear disputes involving assessments.

Once you have filed your tax appeal, a hearing before the County Tax Board is scheduled. The municipality is the opposing party and will be represented by the municipal attorney. The assessor or an appraiser may also appear at your hearing as an expert witness.

At the hearing, taxpayers are required to present their opinion of true market value as of October 1 of the pre tax year.

Is a hearing always necessary?

Yes, a hearing is always necessary. If the assessor, municipal attorney, and taxpayer agree to a settlement or the issues are otherwise resolved, it may not be necessary for you to attend your hearing, particularly if a signed settlement stipulation is submitted to the Tax Board for their approval, prior to the hearing.

What is good evidence to convince the Tax Board to reconsider an assessment?

The most credible evidence is comparable sales of other properties of a similar type in your neighborhood. Remember, if you are going to discuss comparable sales, a listing of 3 to 5 sales should be attached to all copies of your appeal at the time of filing. Any evidence to be discussed at the hearing must be submitted to the assessor and the County Board of Taxation (3 copies) at least seven days prior to your hearing.

Sales of comparable properties used to prove value must have occurred on or before October 1 of the pretax year. Properties that have sold subsequently may be used only to support value, not as direct evidence.

Comparable means that most of the characteristics between your property and the neighboring sales are similar. You should be knowledgeable of the conditions of the sales you cite and be able to give a full description of the properties. Some of the characteristics that would make similar property comparable are: sales price, similar square footage of living area measured from the exterior, similar lot size or acreage, proximity to your property, the same zoning and same use (e.g. duplex in a duplex zone), and the same age of the structure.

The taxpayer must be persuasive and present creditable evidence. Creditable evidence is evidence supported by fact, not assumptions or beliefs. Photographs of both the subject property(the property subject to the appeal) and comparables are useful in illustrating your argument. Factual evidence concerning special circumstances is necessary. For example, if the property cannot be further developed for some reason, evidence to that effect must be provided.

It is necessary for the taxpayer to prove at the onset that the assessment is in error. It is also necessary for the taxpayer to suggest a more appropriate value. This a accomplished by telling the Tax Board the market value of the property as of October 1, of the pre-tax year.

You cannot appeal the taxes on your property since the taxes are the result of the local budgets process. Nor will other assessments be compared to yours. You must pay the collector all taxes and municipal charges up to and including the first quarter of taxes due for the current year in order to be granted a hearing. Remember, the burden is on you, the appellant, to prove that your assessment is unreasonable, excessive, or discriminatory.

If I recently bought my property, is the purchase price considered?

Yes, but it does not mandate a change in assessment. An assessment is an opinion of value.

Uniformity of treatment dictates that minor adjustments not be made simply due to a recent sales price. For various reasons the subject's sales price may not be either conclusive evidence of the property's value or binding upon the Tax Board. An examination of the circumstances surrounding a sale is always important.

Who is an expert witness?

Your municipal assessor and any New Jersey licensed or certified appraiser is considered an expert as to valuation of real estate, to the limits of the licensing or certification status from the State of New Jersey. Other appraisers may qualify as experts before the Board of Taxation, subject to the Board's discretion as to the appraiser's education, experience, professional association affiliation and other factors.

If you intend to rely on expert testimony at your hearing, you must supply one copy of an appraisal report to the assessor, and three copies of the appraisal report to the County Board of Taxation, at least 7 days in advance of the scheduled hearing.

The appraiser who completes the report must be available at the hearing to give testimony and to afford the municipality an opportunity to crossexamine the appraiser.

When will I be notified of the Tax Board's judgment?

The County Board of Taxation will usually typically render a decision of 3 to 4 weeks after a hearing. Once judgment is rendered, the Tax Board loses its jurisdiction in these matters.

May I further appeal the judgment of the Tax Board if I am still dissatisfied?

Yes.  

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