PROPERTY TAX APPEALS: FACTS AND QUESTIONS
1. Should I appeal my property tax assessment? Before appealing your property tax assessment, we must carefully review the value of your property and determine if there is a basis for an appeal. Ideally, an assessment should equal market value. However, an assessment can be wrong or inaccurate, and may exceed market value. In such cases, an appeal may be warranted. Maria R. Cozzini, Esq., will provide a free property tax review to let you know if your property qualifies for an appeal. In certain cases, the assessment may equal or be lower than the market value, and an appeal would not be warranted. Many factors are considered in this determination, which is best made by an experienced property tax attorney in consultation with appraisers and real estate consultants.
2. What is Chapter 123? Chapter 123 refers to ratios used to determine the value upon which property is being taxed (average ratio) and the value needed for a successful tax appeal (upper limit). In many municipalities, assessments equal 100% of market value, especially where the town recently completed a revaluation or reassessment. However, in certain municipalities, there may not have been a revaluation for many years and assessments no longer equal market value. Each year, the State publishes a list of ratios (assessment to market value), for each county and municipality. If the average ratio is below 100%, the assessment should be divided by the average ratio to determine the equalized market value upon which the property is being taxed. However, to determine the value needed to prove for a successful tax appeal, the assessment must be divided by the upper limit ratio. If the upper limit is 100% or above, the assessment would be used for the tax appeal analysis, since the property cannot be taxed for more than its value. Chapter 123 ratios are available at the following site: https://www.state.nj.us/treasury/taxation/pdf/lpt/chap123/2023ch123.pdf. For a more detailed explanation regarding Chapter 123, see the following site: https://ucnj.org/wp-content/uploads/2022/02/Union-County-Current-Property-Value.pdf.
3. Can I appeal my taxes if my neighbor pays less than I do for property tax? A successful appeal cannot be based upon what other people or neighbors pay for property tax. An appeal is based upon value of the property, as determined by comparable sales or an appraisal. County Tax Boards and Tax Courts will not consider other assessments, only value. An appeal is based upon market value only. The amount of taxes that you pay or that neighbor's pay, will not be considered in support of an appeal.
4. Can I appeal my taxes based upon a hardship? No. Property tax appeals are based solely upon value, and individual hardships or situations will not be considered by the Tax Board or Tax Court. There are programs that may be available to provide assistance, such as the New Jersey Senior Freeze Act which will prevent property taxes from increasing, or an available tax credit for seniors or veterans, which provides a rather nominal benefit. Disabled veterans may qualify for a full or partial property tax exemption. Please contact your municipal Tax Collector to review any specific programs that may be available to you.
5. Do I have to use an appraiser for a tax appeal? An appraiser is not required for a residential tax appeal, but is often recommended. An appraiser is an expert in property valuation and will often present a stronger than a taxpayer unfamiliar with the real estate market. An appraiser can make adjustments for property features and gives a more accurate opinion of value. We will thoroughly review your case and give you our recommendation as to whether or not you should proceed with an appraisal. However, this will be your choice. If you do not have an appraiser and the case does not settle, you may have to appear as the witness at the tax appeal hearing. Only an appraiser or taxpayer can testify at the tax appeal hearing. If you have substantial savings potential, the cost of an appraisal is usually justified, but again, this is your option and you can proceed without an appraiser if you prefer. We have a number of appraisers that we work with that are experienced in tax appeal work, and will make a recommendation for you. Commercial properties are valued based upon income and usually require an appraisal for the best result and an accurate valuation.
6. Is there a fee for a property tax review? We will review your property assessment at no cost or obligation.
7, What is the fee for a tax appeal? If your property qualifies for an appeal, we can proceed on a contingent fee basis. There is no legal fee unless we obtain a tax savings for you. If you prefer, an appeal can be handled on an hourly fee basis rather than a contingent fee arrangement.
Where is a tax appeal filed? A tax appeal is filed with the County Tax Board or in certain cases, directly with the Tax Court of New Jersey. Appeals can be directly filed with the Tax Court if the assessment is over $1,000,000. Otherwise, an appeal is filed in the county where the property is located. The County Tax Board is a less formal proceeding and provides for a more expedited decision. If the taxpayer is not satisfied with the decision reached by the Tax Board, the County Tax Board judgment can be appealed to the Tax Court.
9. What evidence is required to prove an appeal at the County Tax Board? The taxpayer must either submit an appraisal or 3 to 5 comparable sales. Evidence must be submitted at least one week in advance of the hearing date or it will not be considered. The evidence must also be presented to the tax assessor and clerk for the municipality. If the taxpayer is relying upon an appraisal, the appraiser must be present at the hearing to testify or the appraisal report will not be considered. Value date is October 1st of the pre-tax year. Comparable sales cannot be distressed properties, foreclosures, or short sales, but must be arms-length transactions.
10. How can I look up other assessments and what others are paying for property tax? Information for most counties can be located at the following website: https://tax1.co.monmouth.nj.us/cgi-bin/prc6.cgi?menu=index&ms_user=monm&passwd=data&district=2001&mode=11. Properties in Ocean County and Essex County can be searched at the County Tax Board websites for those counties.
11. Can I appeal my land assessment only? No. Each property assessment is comprised of a land and improvement value. The total assessment is considered for purposes of an appeal. If the land assessment is high, but the overall assessment equals market value, there is no basis for an appeal.
12. What is the filing deadline for a tax appeal? In most counties, the filing deadline for a regular tax appeal is April 1st. Revaluation or reassessment municipalities have a May 1st filing deadline. The filing deadline for Monmouth, Burlington, and Gloucester Counties is January 15th. The filing deadline cannot be extended, so it is important that you contact us as early as possible so that we can thoroughly review your case and determine if your property qualifies for a tax appeal. Filing deadlines should not be relied upon. Information must be confirmed for your specific property,
If you have any questions or require any assistance regarding a commercial or residential tax appeal, please contact Maria R. Cozzini, Esq., at (908) 232-2414 or contact us online to schedule a free Initial consultation.