Property Tax Appeals...how to
December 31, 2010
All properties have been assessed for 2011, so many homeowners start wondering whethter they should start a tax appeal or not.
Here are some guidlines about tax appeals I hope this helps you
1. Both buyers and sellers can benefit from tax appeals.
a. the seller can make thier property more appealing to prospective purchasers
b. the buyer can potentially reduce their taxes by using their purchase price.
2. The Appeal Process:
a.Filing deadline: APRIL 1st in ALL municipalities that have not had a municipal wide revaluation or reassessment.
b. MAY 1st or 45 days after the Final Notice pf Assessment in municipilaties that have undergone a Municipal wide revaluation or assessment.
c. The filing deadline is STRICTLY ENFORCED. Failure to file your appeal by the deadline will result in you appeal being rejected.
3. Where will the appeal take place?
a. COUNTY BOARD OF TAXATION if the assesment is $1,000,000 or less, you must file with the County Board of Taxation (for me it is Monmouth)
b. TAX COURT OF NEW JERSEY if the assessment is more than $1,000,000 you have the right to file with the Tax Court directly.
4. When is the date of Valuation?
a. The Valuation date for Tax Appeals is October 1st of the previous year. So in todays case it would be Oct. 1st 2010.
5. How Can I tell whether I am over- assessed?
a. In New Jersey, most municipalities do not assess at 100% of true value.
b. At what percentage of true value is my municipality assessing?
Little Silver: 76.84%
Sea Bright: 67.90%
Red Bank: 100%
To find your municipality percentage value : Tax equalization rate
6. How Does Assesed Value Compare to Implied Value?
In the following hypothetical example I will use the above towns as an example:
If your 2011 assessment is $500,000
In Rumson your property is worth $588,512 using the 84.96%
I took the assessed value of $500,000 and divided it by town percentage value which in Rumson is 84.96%
Little Silver: $650,703 using 76.84%
Red Bank: $500,000 using 100%
7. What does the homeowner have to prove?
Assessing is not an exact science.
You must Prove that the Implied Value is 15% TOO High
using the above example the Rumson owner is assessed at $500,000- the owner will have to demnstrate that the value was less than $511,771 as of October 2010 for any relief.
How did I come up with this number? on the chart that you clicked the above link, already has it done for you.
If you want to do it manually you would take the percentage rate in this case 84.96% x1.15= 97.70 (upper rate). move the decimals over to the left. Then divide the assessed value again in this case $500,000ivided by .9770 =$511,770.726 and that' how it is done :)
8. Appeal at Your Peril!!!
a. When a homeowner appeals and their assessment is too low, their assessment can be INCREASED!
b. The possibility of an increase is another reason that it is vital to consider engaging an attorney who focuses mainly on real estate tax appeals to examine the case.
9. Tax Court Value
Tax Court Value generally equals Actual Market Value
Sales Comparison Approach
Cannot compare assessments or taxes to other properties -
The question is what was the Property Worth as of October 1 2010?
in other words Is YOUR VALUE too versus the comparable sales?
10. How can a Realtor Help YOU the Homeowner?
a. A Realtor can gather the information on comparable sale.
b. A Realtor can use the MLS to locate sales data between October 1, 2009 and October 1, 2010.
What is a comparable?
It must have similar location, square feet, acreage, HOME TYPE, age, condition, amenities (pool, basement etc.)
c. Make sure that the Comparable Sales are high Quality.
d Questions to ask:
-Was the sale marked non-usable? ( the SR1A's will have that marked, these are the papers that the town has on each property sale).
- Was the property exposed on the market for a very long time?
-Were there several offers made?
-Was the seller UNUSUALLY motivated to sell?
Monmuth County Appeal paperwork
for more detailed information on assessments
Before starting the appeal proces you may want to get an appraisal done cost can be anywhere from $450 up.
As a buyer who has a contract on a property and feels that taxes and assessment is high can legally start an appeal before they close on the property. This way they can benefit from the appeal during their first year in the new home.
Please feel free to contact me or Ted Kuch contact below for more information.
This information was obtained by me from a seminar that Edward Kuch held. He and his firm handle Real Estate Tax Appeals to contact them:
Edward J Kuch III
Skoloff & Wolfe ,P.C.
Let them know where you got your information.
This information is deemed reliable and nnot guaranteed. Consult your professionals for accurate information pertaining to your individual situation.