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By:
Joseph R. Mariniello, Jr.
Look at any list of the greatest reasons to live in New
Jersey and you will not find the low cost of property taxes. That’s because
New Jersey has the highest property taxes in the nation. But there may be
something you can do about it.
By now each of you has received a notice of what your
property tax assessment is for 2008. This assessment is appealable to either
the State Tax Court or the County Board of Taxation but MUST be appealed by
April 1. In nearly all cases this date is a hard and fast deadline.
The assessment you received is the number upon which
the amount of taxes you pay is based. That is the number you are appealing,
not the actual amount of your taxes. The assessment, using a formula that
involves a property tax ratio, attempts to show the market value of a
property on October 1 of the prior year. In most cases the number you have
is not an accurate reflection of your properties value unless the ratio is
applied. A tax lawyer or, in most towns, the tax assessor can explain this
formula which varies from town to town.
Once the ratio is applied, the true number that the
assessing district claims your property is worth can be determined and it is
from that number you must determine if your property taxes should be
appealed.
As an example, say your property is assessed at
$400,000 and, using the ratio for your town, the market value alleged by the
town is $550,000. Using this number you must show that your property is
worth less. How do you do this? Generally speaking it is through the use
of comparable properties. Using the sales from the past year of homes truly
comparable to yours, could you expect to sell your home for $550,000? If
so, you probably don’t have much of a basis for appeal. If yes, you may want
to consider an appeal of your taxes.
For commercial properties, the market approach is just
one of the ways you can show your property’s value. Often times the income
approach is used to determine the value. This approach determines value
based on the level of income the property brings in, minus customary
expenses. The income approach is used most often when valuing properties
that, due to the unique nature of the site or improvement, is difficult to
find truly comparable properties, such as apartment buildings or small
retail structures.
No matter the type of property, this is the time of
year to appeal. Very often we receive calls after April 1st and
throughout the summer asking us to represent a client in a tax appeal only
to inform them that they must wait several months to have the right to
appeal. Now is the time.
If you have any questions about the process or what to
expect when taking an appeal, please contact us and we will assist with your
questions.
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