What Does Tax Assessment Mean?
A tax assessment is a number that is assigned by the taxing authority of your state, county or municipality, depending on where the property is located, as the value of your property. This number is called your tax assessment. The assessment is multiplied by the tax rate and that is how your annual tax bill is calculated.
There is a distinction between your assessed value and the state equalized value. In theory, the equalized value represents your property’s fair market value, i.e. what a willing buyer would pay a willing seller to purchase the property.
To determine the equalized value, the assessed value is multiplied by the equalization rate. The assessment and equalized values are not always going to be the same unless your equalization rate is 100 percent.
What Is The Value Of A Tax Appeal?
The value of an appeal depends on the type of property that you’re contesting (residential v. commercial v. industrial), the tax assessment, the tax rate and location. For example, if you have a residential building that is located in a booming industrial area or warehouse district, your residential value may be low; however, the value of the property may be significantly higher value due to the potential industrial or warehouse use of the same property.
If you have an office building in an area that’s saturated with other office buildings and you have low occupancy, your income is going to be decreased. When you’re looking at income producing properties, you’re taking that income stream and applying a capitalization rate to determine its value. Similarly, if you own or lease a large industrial manufacturing facility that’s no longer operational that has an assessment of 30 million dollars and the value has fallen to five million dollars, then the tax savings can be hundreds of thousands of dollars, if not more.
The best way to determine the value of a Tax Appeal is to contact an experienced property tax attorney to evaluate your case.
If I Have Commercial, Industrial, Or Developmental Real Estate, Do I Have To Appeal To The Local Board Of Review?
If you have a piece of property in New Jersey that has an assessed value of over a million dollars, you can appeal directly to Tax Court. If your property is commercial, industrial, or developmental real estate and the assessed value is less than one million dollars, you are required to file an appeal to the County Board of Taxation prior to appealing to Tax Court. Each state has a different procedure; it is best to retain an experienced Tax Attorney to help guide you through the process
Should I Hire An Appraiser In My Tax Appeal Case?
When we have a tax appeal and we’re representing a client, we try to negotiate with the assessor or the taxing authority, informally, without the need for hiring an appraiser. In some cases, when we’ve tried everything to negotiate, it becomes necessary to engage an appraiser. We take into consideration your estimated tax savings, the cost to have an appraisal report prepared and the cost of having an appraiser testify. If hiring an appraiser will result in tax savings that exceed the cost of the appraiser, then hiring an appraiser is one of the best means to streamline negotiations and achieve an assessment reduction.
What Are Considered Valid Comparable Sales To Use As Evidence To My Appeal?
When you’re talking about comparable sales data, you want to look at properties that are in the same market area, which can be the same town or towns that are similar. The general geographic area within your state and the properties chosen as comparable sales should be similar in terms of style, present use or potential use.
For more information on Tax Assessments Appeals, a complimentary initial consultation is your next best step. Get the information and legal answers you are seeking by calling (973) 869-5550 today.
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