Stavitsky & Associates, LLC.

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Of Your Tax Assessment

(973) 869-5550

Stavitsky & Associates, LLC.

There is a property tax cap in New Jersey. There is a 2% annual cap in tax rate, not value, that may or may not be exceeded. If the municipality has certain obligations that they must fulfil, the cap can be exceeded. But again, the cap relates to tax rate, not to valuation.

Is There A Certain Point In One’s Life Or Age Where The Property Taxes Will Actually Freeze In New Jersey?

In New Jersey, there is a certain time where the property taxes can be frozen. Several states have what is called the Freeze Act that applies when there is a settlement. New Jersey and New York are two examples. If you file a tax appeal, and the tax assessment appeal is successful, you’re freezing the year of the reduction. In the case of New Jersey, you’re freezing the year of the reduction and two subsequent years. In New York, you’re freezing the year of the assessment of reduction and three subsequent years. In New York, the freeze is essentially mutually binding, which means that the property owner or taxpayer cannot, in theory, break the freeze and appeal that assessment. He or she must wait until the three years are over.

In New Jersey, even though a taxpayer may accept a freeze, they can decide that if there is a change in circumstances, such as a change of market, they can determine that the freeze does not apply. They then can appeal the assessment to seek a further reduction in assessed value.

Is There A New Deadline Or Updated Deadline For Filing Property Tax Appeals In New Jersey In 2020?

Due to the COVID-19 pandemic, the typical April 1st deadline was pushed back to July 1st, delaying appeals by 90 days. We anticipate that in 2021, the deadline for tax appeals will return to the 1st of April. In regard to two counties, Gloucester County and Monmouth County, the deadlines for filing tax appeals for assessed values of $1 million and below for the last several years has been January 15th. Those appeals are taken to the county tax boards. For 2021, Burlington County has moved to a January 15 appeal filing deadline.

What Potential Mistakes Could My Experienced Legal Counsel Possibly Catch When Reviewing My Property Tax Assessment?

Potential mistakes that a legal counsel could possibly catch mostly comprise of valuation issues. You’re not necessarily going to see a mistake at first glance on the assessed value unless it’s something as simple as a typographical error, for example too many zeros having been added. It’s not quite that simple. Your tax appeal attorney has to review the assessment and understand the property that underlies the assessment. They have to know what the property is composed of, what’s its size, and what type of asset it is. Once the attorney knows basic information about the property, such as building square footage, its age, and the income stream associated with the property, they can advise the property owner about whether a tax appeal would be something that should be pursued.

What Possible Risks And Benefits Should Be Weighed Before Filing A Property Tax Appeal? What Could Possibly Go Wrong For Me?

If the property is under-assessed, it can result in it is being re-assessed for a higher value, especially in a state like New Jersey. Another state affect by this is Pennsylvania, where there can be a counterclaim and the jurisdiction could attempt to pursue a higher value. In fact, in New Jersey and Pennsylvania, the trend among certain towns and school districts is to target what they consider to be undervalued real estate and file tax appeals to increase those assessed values. That is permissible under the law, and can result in higher assessed values, even without the taxpayer or property owner filing its own appeal.

Are There Any Special Rules Or Procedures For Filing A Property Tax Appeal When The Assessment Exceeds $1 Million?

There aren’t any special rules or procedures for filing a property tax appeal when the assessment exceeds $1 million. However, if the assessment exceeds $1 million, the taxpayer can opt, for whatever reason, to go directly to the tax court. But they still have the option to appeal to the county board first. One of the benefits in filing a tax appeal to the county board is that your case will be heard sooner. Usually, the matter is heard within a few months of filing the appeal, and be adjudicated by the county tax board.

But, if you file your appeal to the county board, be prepared to supply evidence. For example, if there is a recent sale that helps, provide all the evidence about the sale, such as the sale price, the contract of sale, the deed, closing statement, etc. If there is an appeal filed to the county board that doesn’t have a recent sale associated with it, it is really important to have the property appraised. You have to provide evidence at the county board, and the best evidence is the real estate appraisal report.

If the appraisal is submitted to the board in time for the hearing, then there is a good possibility that the assessor may come to the table to talk settlement or negotiate. Or, there is also the possibility that the county board would find it in the taxpayer’s favor and lower the assessed value. These are all reasons to file with the county board first.

A reason why a taxpayer may decide not to file with the county, and instead go directly to the tax court, would be if the assessment exceeds $1 million. The property type is a factor. A property may be complex, and it may be decided by the taxpayer and his or her attorney that the best forum to consider a tax appeal case is not the county board, but the tax court instead. The only caveat to that is that the taxpayer must be patient because the appeal may not be reached in less than a year’s time, as getting a matter trial ready will often exceed a year.

Does A Property Assessment Equal Fair Market Value?

The property tax assessment may or may not be equivalent to fair market value. It depends on a number of factors. Is the town or county assessing at 100% of market value? If they’re not, what percentage of value are they assessing at? What’s their current ratio? Commonly, in states like Pennsylvania, New York, and New Jersey, ratios are variable from year-to-year. They may very well be assessing below 100% of the Fair Market Value. They could be as low as 10%. They could be 1%. It really is a state-to-state and jurisdiction-to-jurisdiction issue to determine what the ratio is and how that ratio, when applied to the assessment, relates to market value. This is another benefit of hiring an attorney to handle your tax appeal.

After Filing A Property Tax Appeal, How Soon Will The Hearing Be Held?

In New Jersey, New York, and Pennsylvania, when filed to the first level, which are the New Jersey County Tax Board, the Pennsylvania County Board of Assessment Appeals, and the New York Municipal Board of Assessors, hearings are usually held within two to three months of the filing. If you go to court, it depends on the location and the judge assigned to it. In all three states, Tax Court could be a year or longer.

What Is Good Evidence To Use To Convince A Tax Board To Reconsider The Assessment?

The most important issue is valuation. That evidence is best encompassed by a property appraisal. With that being said, there have been many tax appeals at the court level that have been settled without resorting to appraisals.

If I Recently Purchased My Property, Does This Impact The Property Tax Assessment At All?

If you recently purchased property, that could impact the property tax assessment. If your purchase was at arm’s length, and you paid below an assessed market value, you may be entitled to an assessment reduction. If you paid above the assessed market value, I would not recommend that you appeal your tax assessment, especially if it was an arm’s length transaction. In a situation like that, be on the alert for a possible reverse tax appeal. In Pennsylvania this would be filed by the school district. In New Jersey, it would be filed by a town. If either are aware of such a sale, they could decide that since the property was sold above the assessed market value, it should be increased. We’re seeing that occur with a great deal of frequency in New Jersey.

Will A Property Tax Appeal Be Private Or Is That Public Information?

In theory, if you file a property tax appeal, it’s considered public information because of where it is filed. The court or county board is a public forum. Whether or not the information associated with the appeal is something that anyone would be interested in beyond the taxpayer is another question. If there is an actual written decision that establishes some law, there’s likely going to be public information available about the case. But, that is usually after the fact. Although it is public, its exposure, just by the nature of tax appeals, tends to be somewhat limited.

For more information on Property Tax Appeals, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (973) 869-5550 today.

Stavitsky & Associates, LLC.

Call For A Complimentary Review
(973) 869-5550