FAQ
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How is my assessment determined?
The New Jersey Constitution requires all property to be assessed according to the same rules at true value. Most New Jersey municipalities attempt to comply with this mandate by conducting periodic revaluations conducted by the local assessor with the assistance of well-qualified appraisal firms. The assessment may be based on any of the three recognized appraisal methods but because of the requirement for uniform rules, assessments tend to be based on the cost approach.
What is a property tax appeal?
A tax appeal is a process in which the government allows a property owner to determine whether he is being assessed fairly.
When is the filing deadline?
The filing deadline is April 1 of the year in question.
How does the process work?
A tax appeal is your opportunity to prove that your assessment is excessive or discriminatory. All assessments are based on market value. An assessment is excessive or discriminatory if it violates either of two standards:
1. An assessment may not exceed market value.
An assessment may not exceed the market value of the property as of the assessment date. The assessment date is October 1 of the pretax year. Thus for 2014 assessments the assessment date is October 1, 2013.
2. An assessment may not exceed the common level range.
Recall that not all municipalities even attempt to assess property at its market value. The legislature has recognized that if most property is assessed at 50% of market value (the common level) your property may be over assessed even if it is assessed at less than market value. But an assessment need not be perfect to be fair (or at least fair enough) as far as the law is concerned. The test for fairness is found in New Jersey Statutes 54:3-22 and 54:51A-6 commonly known as Chapter 123. Each year the State Division of Taxation conducts a sale survey to determine the average ratio of assessed value to true value. Chapter 123 establishes a concept known as the “common level range” which is15% more (the upper limit) to 15% less (the lower limit) of the average ratio. After the county board of taxation determines the market value of the property they compare the market value to the assessment. If the ratio of assessment to true value exceeds the average ratio by 15% then the assessment is reduced to the common level. If the assessment falls within the common level range, 15% plus or minus of the average ratio, no adjustment will be made. If the ratio of assessment to true value falls below the common level range the assessment will be increased to the average ratio.
| Example One | Example Two | |
|---|---|---|
| Average Ratio | 50% | 50% |
| Upper Limit | 57.5% | 57.5% |
| Lower Limit | 42.5% | 42.5% |
| Common Level Range | 42.5% to 57.5% | 42.5% to 57.5% |
| Assessed Value | $500,000,000 | $500,000,000 |
| Market Value | $800,000,000 | $800,000,000 |
| Ratio | 62.5% | 55.55% |
| Result | The ratio exceeds the upper limit of the common level range. The assessed value is reduced to the $400,000,000. | Although the ratio exceeds the average ratio, it is within the common level range. The assessment remains $500,000,000. |
I’m confused. Is it important that I understand that?
That is one of the reasons you hire a lawyer. All you have to know is that your assessment is based on the market value of your property as of October 1 of last year. But you can see how important it is to hire a lawyer who understands property tax procedure and valuation.
Can my assessment be raised if I appeal?
Yes. Although it rarely happens and has never (knock on wood) happened to a Blau & Blau client. If a municipality proves that the property is under assessed the county board of taxation or New Jersey Tax Court can raise the assessment. That is why Blau & Blau carefully analyzes each case to make sure that the property is over assessed before filing an appeal.
Will my case be heard by the county board of taxation or by the New Jersey Tax Court?
If your assessment is less than $1,000,000, your case must be filed first with the County Board of Taxation. County Boards of Taxation hear cases in a summary manner and often affirm the assessments even when a property is over assessed. A taxpayer who is not satisfied with the result of a County Board of Taxation hearing may appeal to the New Jersey Tax Court within 45 days of the entry of the County Board judgment. New Jersey Tax Court hearings are more formal trials than County Board of Taxation hearings.
Because of the summary nature of county board of taxation hearings, Blau & Blau often uses the county board process as an effort to negotiate a settlement with the assessor. If a settlement cannot be negotiated, Blau & Blau often has the assessment “affirmed without prejudice” and appeals to the New Jersey Tax Court.
Do I have to pay my taxes in order to appeal them?
In general the answer is yes. Failure to keep your taxes current may result in the dismissal of your appeal. If you are unable to keep your taxes current, please notify Blau & Blau immediately.
Will my case be tried in court or will it be settled?
About 95% of the cases filed in the New Jersey Tax Court are settled without a trial.
Will I need an appraisal?
Not necessarily. You will almost certainly need an appraisal if your case is tried. However, we settle a significant number of cases without a formal appraisal.
What percentage of your cases do you win?
We attempt to carefully analyze each case to make sure it has merit before filing an appeal. We reduce the assessment on about 75% of the properties that we appeal. If we win more than that, we worry that we are turning down good cases. If we lose more than that, we are concerned that we are wasting too much of our time.
Will I win?
We can’t say for sure, but if we don’t think that we have a good case, we won’t take it.
What does it cost?
Most of our clients prefer a contingent fee agreement. That means that you don’t pay unless we are successful in reducing your assessment.