New Jersey Property Tax Appeals – A Quick Guide

April 26, 2013

Over the last few years, several folks have asked me about appealing their New Jersey property taxes and I have filed a bunch of these cases this year. In years past I have done a few of my own as well. Many folks I speak with are very angry with the rise in New Jersey property taxes over the years, leading to major budget issues for family and others to sell their homes.  My thoughts in the appeal process are below.

As I write this Blog Post on April 26, 2013, I have just settled 4 pending property tax appeal cases that I have going on with most of my other hearings expected to be set for the next few months, so I will update again as more results come in.

A quick background and disclosure: For fair disclosure, I am an attorney with offices In Philadelphia and South Jersey, with primary focus on family law, bankruptcy, immigration, and some other general practice. In recent years I have started investing in real estate and have done several of my own property tax appeals, so I have started offering this same service to my current clients upon their requests.  And the usual silly disclaimer for our litigious society: THIS IS FOR INFORMATIONAL PURPOSES AND DO NOT TAKE ANY OF THIS AS LEGAL ADVICE (full disclosure link: http://www.reinherzlaw.com/legal-disclaimer.html)

Here are my quick observations thus far in the few years that I have been dealing with this:

1)      If you have recently purchased your property, make sure to contact the local assessor upon purchase if the assessment is much higher than purchase price, to try to get them to voluntarily work with you before the actual appeal is filed. I have had mixed results with this and it will really depend upon the town. With municipal and county budgets tight, it seems to be more difficult to get concessions. If you are planning significant upgrades, I would suggest trying to get them to look at the property ahead of time or you should at least take “before photos” to use as evidence later. I will note that this does at least get the local or county assessor that you are dealing with to know you already and possibly be more willing to work with you later.

2)      Assuming that you are not able to get them to drop your assessment without the appeal, step 2 is to file the actual appeal form. Several of the Counties have an online PDF that you can fill out or you can get a paper copy from the County. The filing fees are generally $5 if your property is assessed for less than $150,000 and $25 for those assessed higher than $150,000, with some increased fees for even higher priced properties. You file these at the local county level, but you must also serve the local tax assessor (if there is one – Gloucester County has done away with the local assessors) and serve the local town clerk (hint- you must be current on your taxes and water/sewer…if the town clerk reports that you have back taxes or water/sewer owed, they will dismiss your appeal if you do not get “current”/paid.

3)      Deadline to file is normally April 1st unless your town just has its major revaluation year, in which case the deadline is May 1st. In a revaluation/reassessment year, you are normally sent notice of the new proposed assessment figures with an opportunity to contest this without filing a full appeal. In several instances, I was successful in my revaluation year at the informal meeting without full appeal, but I did my homework before the informal meeting, presenting usable comparable sales and other evidence.

4)      There are several rules of the game that you need to be aware of. There is a 15% window or error margin that the assessors have, so you have to be over-assessed by at least 15% unless it is a revaluation year. (So make sure to request a new value lower than 15% of the current assessment and have support for same) You must find comparable sales that settled within 1 year before October 1st of the prior year (So for this year the comparables are from between 10/1/11 to 10/1/12). There is an advanced search feature that you can use on the public records to search within these dates. The sales must be considered USABLE. You will notice a non-usable NU code number if the sale is not considered non-usable. If you list all non-usable sales on your Petition or the properties did not sell within the proper time period, they will not take you seriously and they will Object to your evidence. I generally fill out the Petition carefully, paying very close attention to usable comparable sales that I pick. I also include a cover letter in which I might slightly advocate for my position, possibly listing a few other usable sales and noting some non-usable sales as well. The biggest issue is that a large percentage of sales are non-usable (typically short sale, bank owned, or estate sales but there are several categories of non-usable sales and you can look up those categories online)

5)      The next deadline is 7 days before the scheduled hearing date in which any other evidence is due. You can submit final evidence up until 7 days before your hearing and the County or Local Assessor may also send you some of the comparable sales that they will rely upon. The best evidence is an actual appraisal that was recently done specifically for the appeal (not from the mortgage company when you purchased) and the appraiser also needs to testify as an expert at the hearing to authenticate this evidence and be available for cross examination by the tax board. You might also supplement with other evidence such as realtor valuation reports or your own research up until the 7 day deadline. I also suggest bring photos to support your case, such as of parts of the home that may need work or have issues. Many of my clients have been very successful with winning their appeals, even without the extra expense of an appraisal. An appraisal is great, but the extra expense of the appraiser and having her-him testify is not always in the budget.

 

6)      These cases sometimes settle before hearing, although certain towns are tougher than others. They will sometimes mail you a proposed Stipulation of Settlement that you basically sign and get back to them in lieu of the hearing if they want to settle. Others can sometimes do a more informal settlement in which you voluntarily dismiss your appeal if the assessor agrees to reduce the assessment the next tax year. I believe that this is because the budgets are already set for this year and they sometimes want to keep those in tact but may work with you to voluntarily reduce for the following year. If have done several of these settlements, particularly when there are a bunch of higher comparables which hurt my case, but they have worked with me many times on settlements if my evidence has been favorable.

 

7)      You can appeal your hearing outcome to Trenton if you are unsuccessful in your case, but this is a long expensive process since it would be treated like a full more formal trial. Not really feasible or cost effective in most cases.

 

We are not necessarily looking for miraculous results here, just to improve our budgets, cash flow, or affordability of the property. The result will ultimately be based upon the facts of the property, your preparation, how well you advocate, and the folks you are dealing with. There is a human element involved here too, so be respectful and professional to get the best result.

 

Feel free to contact me anytime for help with your appeal. – Dave Reinherz, reinherzlaw@gmail.com, 856-302-3989 or 215-603-4317

 

Some useful links which I shortened:

 

goo.gl/mbxgP  (tax records for finding comparables)

 

goo.gl/9WfwN (Camden County tax board with form links for appeal petition)

 

goo.gl/Yaiuj   (Gloucester County assessor)

 

 

goo.gl/n8byN (Tax rate tables – multiply assessed value times your towns rate to find out annual taxes and to evaluate savings amount at lower assessed values)

 

goo.gl/sh3Es (Equalization tables –  you need to multiply your assessed value by a percentage to find out what they are actually saying your property is worth – if you have not been revalued for awhile, they may be saying your property is worth way more than the assessed value!)

 

http://www.state.nj.us/treasury/taxation/pdf/lpt/guidlines33.pdf   (Non-Usable codes – This is a fun read if you ever have insomnia!)

 


goo.gl/6ONNX
  (Petition of Appeal)

 

BY David Reinherz

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