Residential Property Tax Appeals
From my Bergen County, NJ office, I handle NJ Real Estate Property Tax Appeals on behalf of Real Estate owners of both residential and commercial properties.
To help you make a decision about pursuing your NJ Real Estate Tax Appeal, please review our FAQ's by clicking on any of the topics below. We suggest you start with #1. Answers will appear below the list of Questions.
Frequently Asked Questions: NJ Real Estate Property Tax Assessments and Appeals
- 1. Should I appeal my NJ Real Estate property tax assessment?
- 2. What if my neighbor’s assessment is much lower than mine?
- 3. How much can I save, and why is “ten years out” important?
- 4. What is the last day to file an appeal?
- 5. Will my taxes increase because of the revaluation?
- 6. Is there a fee for an initial consultation?
- 7. Where do I file my appeal?
- 8. Do I have to prove my house is over-assessed by 15%?
1. SHOULD I APPEAL MY NJ REAL ESTATE TAX ASSESSMENT?
In order to determine whether or not you should appeal your current NJ Real Estate property tax assessment, please click here to use our New Jersey Property Tax Appeal Calculator so that we may assist you in making that decision.
ANSWER2. WHAT IF MY NEIGHBOR’S ASSESSMENT IS MUCH LOWER THAN MINE?
Even if your next door neighbor’s assessment is “low” or lower than your assessment, this is not a valid basis for an appeal. An appeal is recommended when the property is assessed in excess of its true value, as stated above. To paraphrase a Tax Court Judge: a homeowner is entitled to a fair assessment, not necessarily an assessment that is more fair than that of his neighbor.
ANSWER3. HOW MUCH CAN I SAVE, AND WHY IS “TEN YEARS OUT” IMPORTANT?
YEARS OUT - why we must look at property taxes using a long
term lens. As towns and counties increase their budgets,
our taxes increase at a geometric rate. Therefore,
a homeowner should consider potential savings as a result
of a successful appeal over TEN years or longer, and factor
in the likely budget (tax) increases. Using the example
below, an assessment which is only 5% above true value can
create huge overpayments in property taxes over the long
New Assessment $830,000.00 (for tax year 2007)
(minus) True value $789,000.00 (as of 10/1/06)
Equals the amount the home is “over assessed” $ 41,000.00 (approx. 5%)
new tax rate is .0120.
Yearly taxes for 2007 will be $9,960.00 (.012 x $830,000.00 = $9,960.00)
Assume, like most of New Jersey, county and Municipal budgets are rising 6% each year.
IF THIS HYPOTHETICAL HOMEOWNER DOES NOT FILE AN APPEAL,
THE HOMEOWNERS WILL PAY AN EXTRA $6,484.95 OVER
10 YEARS, UNTIL THE TOWN UNDERGOES ANOTHER REASSESSMENT.
First year overpayment (5% of yearly taxes) - 5% x $9,960.00 = $492.00
year overpayment (town raises taxes by 6%) =
Yearly taxes are now $10,557.60
Total of 1st and second year overpayment = $1,013.52
year (town raises taxes by 6%) =
Yearly taxes are now $11,191.06 Total 1st, 2nd, and 3rd year overpayment = $1,566.33
so on, until
After the tenth year - the total amount the homeowner has OVERPAYED is $6,484.95
As this example shows, the effect of a small over-assessment can create much larger losses over time.
In a second example with a more expensive home ($1,425,000.00), where the owner is paying $18,000.00 per year in property taxes, the effect of a 5% over-assessment creates a total overpayment over ten years of $11,862.72!
ANSWER4. WHAT IS THE LAST DAY TO FILE AN APPEAL?
The general deadline for filing appeals is APRIL 1, 2012**. This deadline applies to appeals with the County Tax Board and direct appeals with the Tax Court. The appeal must be RECEIVED (not mailed) on or before this date.
An appeal can also be filed within 45 days from the date the township MAILS the assessment. Generally towns mail the assessment on or before February 15th, so the April 1 deadline remains the applicable date. However, if the assessor is late in mailing the assessment, you may have additional time. In a revaluation year, property owners have until May 1st to file an appeal. Again, please contact my office or another attorney immediately if you have questions regarding a filing deadline.
** Note - these are generally applicable deadlines, however exceptions may apply to your case. Please contact my office or another attorney immediately if you have questions regarding a filing deadline. Also note, there are special deadlines for added or omitted assessments.
ANSWER5. WILL MY TAXES INCREASE BECAUSE OF THE REVALUATION?
That depends upon whether the increase from your old assessment to your new assessment is more than the average increase in assessments in town. This is one of the rare instances where your old assessment is relevant.
Example: If the average home in your town was assessed at $400,000.00, and after the revaluation, the average home is now assessed at $800,000.00, then the average assessment increased by a factor of 2. If in this typical town, your home was assessed at $405,000.00 before the revaluation, and it is now assessed at $845,000.00, then your taxes will INCREASE, because your home’s assessment has increased by a factor of more than 2x. (Higher than the average increase). On the other hand, if your old assessment was $405,000.00 and the new assessment is $795,000.00 then your taxes will likely decrease. A tax neutral revaluation for a home that used to be assessed at $405,000.00 would be $810,000.00 (old assessment multiplied by 2 = new assessment). In this instance the homeowner will pay exactly the same taxes after the revaluation, as long as the town does not increase its budget. (chances of this are slim to none in the Garden State)
As stated above, an increase or decrease in the municipal budget will also affect your yearly taxes. Any increase (or a rare decrease) in the municipal budget will of course affect the total amount you pay, but this is UNRELATED to the revaluation. For example, if your assessment increases at the same rate as the average home in town, but if the municipal budget increases by 6% your taxes will rise by 6% due to the increased municipal budget, just as they would have grown in the absence of the revaluation.
DO NOT confuse “should I appeal?” with “will my taxes increase?” - In the second example above, even though the home’s assessment increased less than the average, if the home is worth only $750,000.00, not $795,000.00 (thus the home is “over-assessed”) then the owner should consider an appeal, and if the appeal is successful, that homeowner would pay even lower taxes.
ANSWER6. IS THERE A FEE FOR AN INITIAL CONSULTATION?
I do not charge clients for an initial consultation. Usually I can offer an opinion as to whether an appeal is advisable. Please do not hesitate to contact me with questions.
Please understand, I only want to accept clients whose property is unfairly assessed. Frankly, if I were to recommend a client file an appeal in every case, even in cases where a home is fairly assessed, I would create a trail of unhappy clients. By accepting only those clients who should appeal, I build a long term relationship with the community, and create happy clients who recommend my services to others.
ANSWER7. WHERE DO I FILE MY APPEAL?
There are two possible venues for an appeal.
- A. The County Board of Tax Appeals. In this venue a Tax Board Commissioner hears the evidence and decides the case. This venue is a bit less formal than the Tax Court. If you are successful, the commissioner will decide the new assessment. If you are unsuccessful, you have the right to a further appeal with the Tax Court of New Jersey.
- B. The Tax Court of New Jersey. In order to file an appeal
in the Tax Court, and have a Tax Court Judge decide your
appeal, your home must be assessed at $750,000.00 or more
(this is called a “direct appeal”) - OR - if
you previously appealed to the County Board, and are unhappy
with the Commissioner’s decision, you can file a
further appeal in the Tax Court.
Commercial appeals are generally heard in tax court.
ANSWER8. DO I HAVE TO PROVE MY HOUSE IS OVER ASSESSED BY 15%?
After a revaluation, the town’s legal advantage, which requires a homeowner to prove an over-assessment by a particular percentage (as much as 15%) does not apply. There are other exceptions - please contact me with any questions.
The above information is not intended
as a substitute for legal advice.
Most attorneys who are knowledgeable in this area are happy to spend a few minutes answering questions.