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Property Tax Appeals2023-03-14T11:25:28+00:00

Property Tax Appeals

If you are over-assessed we can help

New Jersey has some of the highest property taxes in the USA. You shouldn’t be paying more than your fair share.

Property taxes = tax rate X tax assessment (value of the property)

It is a simple formula in theory. Your property taxes should be based on the value of your property. The municipal tax assessor sets this value and it is called the “tax assessment”. Because in most municipalities a property’s tax assessment does not change each year, but property values do, a “ratio” is used to “equalize” the assessments to their market value for a particular year. Unfortunately, for a number of reasons your assessment might not accurately reflect your property’s market value. When the equalized assessment is significantly higher than the actual market value of a property, the property owner can file a tax appeal.

Peter Cecinini has represented both sides and may be able to help you save money on your taxes. As a former Assistant City Attorney for the City of Bayonne, Peter has defended a major municipality in literally thousands of Tax Appeals brought by property owners. On the other side, Peter has saved his taxpayer clients thousands of dollars by appealing their property tax assessments at both the County and State Tax Court level. Peter has even taught tax appeal continuing legal education courses to other attorneys, on behalf of the Hudson County Bar Association.

If you are interested in filing a property tax appeal, or if you are unsure whether your property is over-assessed, we can help. There is no “consultation” charge, feel free to call or e-mail any time. Although you are free to visit our office to discuss your case, we can usually answer all your questions over the phone and forward you any necessary paperwork electronically or by mail. In most cases we can file your appeal without your ever having to leave home. Whether you own a 2 family house in Jersey City or a large victorian in the “burbs”, whether you are a commercial property owner or a commercial tenant, we may be able to help you save money on your property taxes. We charge on a contingency basis, meaning if we don’t save you money, you don’t owe us money. We only take cases that we are confident we can win, and save our clients money on their taxes.

Property Tax appeal FAQ’s

Can I appeal my own property taxes?

You have the right to represent yourself in tax court as long as you are not a business entity. For example, a corporation must be represented by an attorney for a tax appeal. However this area of law has many complications, and if you don’t know what you are doing you could compromise your own interests – in some circumstances even increasing your taxes. This FAQ section alone does not provide adequate information and advice to represent yourself, it simply serves to answer some of the common questions my clients have had in the past. Each and every case has specific circumstances which must be addressed, and general information is just that, general. It costs nothing to call us, and we will be able to tell you whether you have a case or not, free of charge, whether you decide to retain our services or not. The savings you get from a successful tax appeal usually carry on for several years. It is a wise investment to do it right in year one, and hiring professionals to represent you and ensure that you don’t waste your time and money in the long run is just common sense.

How is a property tax appeal filed?

There is only one chance per year to appeal your property tax assessment. Typically the appeal must be filed by April 1* of the year being appealed. Taxpayers must submit appeals to their county’s Tax Board and serve notice to all appropriate parties. Appellants must also provide evidence supporting their appeal at least seven days before their hearing date.

*There are some exceptions to this date. For example, Monmouth County has a January 15 filing date, if your town has just done a revaluation the date is typically May 1, and if you wish to appeal an added assessment you must do so by December 1.

How do I prove that my tax assessment is too high?

The burden is on you to prove that your property is over-assessed. Evidence used to support the value of a residential property generally (but not always) takes the form of comparable sales from within the “sampling period”. Sales made before or after the sampling period are not usable as evidence, nor are those which fall into one of several “non-usable” categories. For example — estate sales, even from within the sampling period, are generally not accepted by County Tax Boards as evidence of value. That said, the burden is on the tax assessor of your municipality to prove that any particular sale is non-usable for proving value, and there are circumstances in which this burden is not met. Knowledge and experience with the entire tax assessment process becomes extremely valuable in such situations.

Do I need to hire an appraiser as part of this process?

In a residential tax appeal an appraisal is not always necessary to prove home values. A listing of comparable sales may often suffice. However, in higher-value residential properties — defined as those valued at $500,000.00 or higher – or in commercial cases, it is highly recommended that appellants obtain a preliminary appraisal report to support their claim. The up-front cost of a county-ready appraisal report is generally in the hundreds of dollars, and almost always pays for itself in the first tax season that you realize savings. Each year your assessment stands thereafter the entire amount of savings goes directly to you. Even if you account for paying an appraiser to provide a report, the better result in the end will usually pay for itself, and will most likely save you more money in future tax years than if you had not hired an appraiser to begin with.

Can I use the appraisal report I got from re-financing my home as evidence?

While it may help you decide whether an appeal is warranted for your property, the appraisal report issued for the purposes of re-financing your property is not adequate evidence for a tax appeal. A re-financing appraisal report generally uses different data than what must be used to prove home values for tax appeal purposes, and 364/365 times has the wrong valuation date. The valuation date for any tax appeal evidence must be October 1 of the prior tax year.

I looked at my tax bill, and the assessed value of my home seems much lower than it should be. Why?

In most municipalities the assessed value is not the same as the actual fair market value claimed by the Assessor. The town’s Average Ratio must be applied to the assessed value of a property to determine the fair market value of the assessment. Some municipalities have average ratios as low as 1/3 or less of the actual fair market value of the house. You find the market value (“Implied Market Value/IMV” or “Equalized value”) of your assessment by using this formula:

Actual Assessment/Average Ratio = True Market Value of your Assessment

Note however that if this formula comes to over 100% then you should use 100% instead. You can find the Chapter 123 ratios for your town here: https://www.state.nj.us/treasury/taxation/lpt/statdata.shtml

What is the “Corridor”?

Even if a property is over assessed after applying the average ratio, you must still apply the “upper limit” ratios to see if you have a case. Homeowners must not only prove that their property is over-assessed, it must be over-assessed by a statutory percentage (in most cases 15%). For example, in most cases if you can only prove that your $500,000.00 assessment should really be $499,000.00, you do not have a good case and your assessment will most likely remain at $500,000.00. A different ratio must be applied for each municipality, to find the “corridor” that must be proven in order to win your case. Find the corridor using this formula:

Total Assessment/Upper Limit Ratio = True Market Value of your Assessment

Note however that if this formula comes to over 100% of the assessment then you should use 100% instead. You can find the Chapter 123 ratios for your town here: https://www.state.nj.us/treasury/taxation/lpt/statdata.shtml

Do I have to attend the tax appeal hearing?

If you hire an attorney to represent you, most likely you will not have to attend the hearing. This is highly fact dependent however. The vast majority of cases are settled beforehand between your attorney and the municipal Tax Assessor and don’t require a trial before the Tax Board. However if the Assessor makes no offer to settle your case, or if the offer is too low, it may be in your best interest to try the case. Although it may not be absolutely necessary that you appear at this trial, it is usually highly recommended that you attend. You are the only person other than an appraiser who can present factual testimony on your own behalf at the trial. If you have retained an appraiser to support your case, it becomes far less important that you attend the trial.

Once I get a judgment lowering my tax assessment, do I have to appeal again next year?

In most cases you do not. “Spot assessments” are not technically allowed in NJ, meaning in most counties your assessment may not generally be raised by the tax assessor in any given year. The “Freeze Act” also grants some protection from re-assessments. There are exceptions to this rule, for example if your municipality conducts a revaluation/reassessment, has rolling revaluations, or if you make significant improvements to your property or change its legal use, then the Assessor may raise your assessment through an added assessment. There are also some other circumstances where your assessment can be changed. But in the great majority of cases the tax appeal reduction will stand for multiple years, and it is not uncommon for a tax assessment to remain unchanged for as long as a decade or more.

What is an “added” assessment?

An added, added omitted, or omitted assessment is how a tax assessor can change your assessment during the tax year without it being an illegal “spot” assessment. They can only do this if the property has significantly changed in value or legal use. It cannot be done just because repairs or very minor renovations (such as re-painting an apartment or replacing a vanity) are made to a property. The classic example would be an old, worn-down property that is gut renovated in say March of a given tax year. In October of that same tax year the tax assessor would be able to issue an “added” assessment on top of the original assessment, to make up for the increase in value. The added would be pro-rated to the net month after the construction was completed, typically defined as when the CO or CCO is received. Other common examples of when an added might be issued is for new construction, or the conversion of a property to condo use. You have until December 1 to appeal an added assessment, not just on value, but also on whether it was appropriate for the assessor to issue it in the first place. If you fail to appeal by December 1, you can appeal the next year but only base on value (and you would have to pay the full added assessment for the year of the added in that case).

Can I appeal a County Board level judgment to the State Tax Court?

Yes. You have 45 days from the mailing date on the County Board Judgment to file your State-level appeal. In some cases (usually involving a large commercial assessment) you can appeal directly to the State Tax Court without having to file at the County first.

If I win my tax appeal this year, will my savings next year be the same as they were this year?

Remember, your taxes are the assessed value of your property times the tax rate. So a 20% reduction in your assessment, for example, will be a 20% reduction in the property taxes you pay, no matter what the tax rate is next year. Remember that the tax rate for any municipality often does not come out until July or later of the tax year, so estimated billing based on the prior year’s tax rate is used for the first two quarters of any given tax year and the third and fourth are billed slightly higher to make up for the total annual difference.

I have an abatement on my property, or I’m not sure if I have one, can I still appeal?

If you have an tax abatement/exemption/PILOT on your property, and you appeal your assessment, the Tax Assessor in many cases can legally move to eliminate the abatement. Sometimes the tax benefits of an appeal can outweigh those of losing the abatement. Call us if you are unsure about whether you should file, as we can guide you through the common pitfalls in this area of law.

I received a judgment lowering my tax assessment. When will I see the savings?

Every case is different, but there are several ways you could actually receive your savings. For example if you appeal your tax assessment on April 1 and are successful, you will most likely not receive the actual judgment until July or August of that same year. Most municipalities will simply apply the total savings for the year to the fourth quarter tax bill, which will therefore be greatly reduced. However some municipalities don’t apply the reduction in time for the fourth quarter bill. In this case, you would pay the entire original amount of the fourth quarter, and your savings would most likely be mailed to you as a refund after January 1 of the following year. Sometimes the refund is mailed to your attorney earlier than that. And in other cases the reduction is applied as a credit off the first and second quarters of the next year.

If you pay your taxes through a mortgage company, it is possible that the savings will go through them. You may receive a check for the amount you overpaid as part of the annual escrow calculation and your next year’s monthly payments would be reduced appropriately, or that amount may be applied to your escrow account if it is low. Each municipality handles the reductions differently, as do most mortgage companies. However once we successfully reduce your assessment, we can usually guide you through the process of ensuring that you get paid in a timely manner.

I own a commercial property and want to appeal my assessment. Is this any different from a residential property?

Yes it is a completely different situation if you own commercial property. First, as mentioned previously, any property that is owned by a business entity (ie a corporation or LLC) must be represented by an attorney. More importantly the method of proving value is different for commercial properties. While the comparable sales or construction cost approach methods of valuation are sometimes still used as “back up” in a commercial appraisal, the “income approach” to valuation is the standard method of valuing commercial properties for property tax appeal purposes. This means a cap rate is applied to the potential gross rental income of the property to determine value, with some adjustments for expenses and vacancy. Commercial appeals often require an appraisal report, and bigger cases are commonly “AWOP’d” at the County Board and thereafter litigated at the State Court level. If you own a commercial property, or if you are a commercial tenant and pay the property taxes on a property through your lease, call us as we may be able to help you. After asking a few simple questions, we will in most cases be able to tell you whether your property may be over-assessed and whether an appeal is warranted. Importantly, we will be able to tell you whether an appeal may be a bad idea as well.

I own commercial property and received a “Chapter 91” income/expense request, do I need to fill it out?

A municipality can request the income and expense information of any commercial property each year by sending the owner a “Chapter 91” request by certified mail, along with a copy of the statute itself which gives them the authority to do so. A taxpayer has 45 days to fill it out and return it to the assessor, or else they can lose the ability to appeal the commercial assessment that year. These are often done by municipalities right before revaluations or other tax events which could significantly raise the taxes on commercial properties, because most commercial property owners either don’t actually get them (have the wrong mailing address on the tax records) or just don’t bother replying. If you receive one, it is important you fill it out as best you can and return it to the tax assessor by certified mail within 45 days. Keep the receipt so you can prove you sent it in on time, in case the assessor loses it (they often do).

I am a commercial tenant, not a property owner, but I pay the taxes on the building I rent. Can I appeal the tax assessment?

Yes most likely you can. If your lease agreement provides that you pay the property taxes on your rental premises, then you generally have standing to appeal the assessment of that property.

I am a non-profit organization, can I get property tax-exempt status?

Certain non-profit organizations are eligible for a property class determination giving them essentially tax-exempt status as far as property taxes are concerned. Churches are the most obvious, but many other organizations qualify for this exemption. This area of law is extremely complex, so give us a call if you have any questions about your organization’s ability to reap the benefits of a tax exemption.

I am a non-profit organization, I lost my tax-exempt status what can I do?

Non-profit property tax exemptions are usually taken away by an assessor through an added assessment. Remember, added assessments in most cases must be appealed by December 1 not April 1. Non-profit property tax exemptions can be lost when the property fails to be used for its tax exempt purpose, or if they are not renewed every 3 years. YOU MUST BE PRO-ACTIVE IF YOU HAVE LOST YOUR TAX EXEMPT STATUS! An appeal must be timely filed or you will be liable for the taxes. For example a case we once litigated involved a church which lost its exemption but did not fully understand the implications of the added assessment it had received. As a result, they owed $37,000.00 in taxes which it was too late to appeal. They would have owed $53,000.00 more the next year but we filed an appeal just in time. In this case we were able to re-gain the tax exemption, and their $53,000.00 tax bill immediately went to $0.00. Every case has its own facts, and results can’t be guaranteed in this extremely complex area of law, but if you have lost your tax exemption give us a call we might be able to help.

I am not sure whether I should file a tax appeal, what should I do?

Call or e-mail us, whatever is best for you. We can look up your current assessment, and after asking you a few questions we can usually give you an answer on the spot.

We specialize in all areas of real estate and probate law. If you have any questions at all, please don’t hesitate to contact us.

Call (201) 354-9305 now to speak directly with an attorney, or feel free to e-mail your inquiry directly to office@cecininilaw.com. We welcome your questions!

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