New Jersey Property Tax Appeal Time

by McCarter & English, LLP
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It is property tax appeal season in New Jersey.  If you own or lease commercial, residential and/or investment property in New Jersey, now is the time to review whether you should file a 2013 appeal. 

If you own real property in New Jersey, by February 1 you will receive a Notice of Assessment from the local tax assessor.  The assessment on the Notice should reflect the fair market value of the property as of October 1 of the previous tax year -- in this case, October 1, 2012, for the 2013 year.

The assessor must express the assessment of property on the Notice in terms of its taxable value.  The term "taxable value" is defined as the percentage of true value established by each county board of taxation for all taxing districts within the county.  The percentage of true value at which property is assessed varies among the taxing districts.  For example, property assessed at $75,000 in a municipality that has an average ratio of 75%, has an equalized fair market value of $100,000 ($75,000 ÷ .75 = $100,000).

The New Jersey Legislature in 1973 adopted a formula known as Chapter 123 to test the fairness of an assessment. Once the Tax Court or County Board of Taxation has determined the true market value of a property during an appeal, it is required to automatically compare the true market value to the assessment.  If the ratio of the assessment to the true value exceeds the average ratio by 15%, then the assessment is automatically reduced to the common level.  However, if the assessment falls within the common level range, no adjustment will be made.  If the ratio of the assessment to true value falls below the common level, the Tax Court or County Board of Taxation is obligated to increase the assessment to the common level.  You should inquire as to your district's average ratio before filing a tax appeal. This ratio changes annually on October 1 for use in the subsequent tax year.

If taxpayers determine that their property is overassessed for 2013, they must file an appeal to contest the assessment by April 1, 2013.  In taxing districts that have implemented town-wide reassessments or revaluations, the filing deadline is May 1, 2013.

If the assessment on a property is $1 million or below, a taxpayer must first file an appeal with the County Board of Taxation.  The taxpayer can then appeal the County Board's determination to the Tax Court.

If the assessment on your property is above $1,000,000, the taxpayer can file directly either with the Tax Court or the County Board of Taxation.

McCarter & English, LLP, has successfully filed tax appeals, negotiated settlements and litigated tax appeals on a variety of commercial, retail, industrial, hotel and vacant land properties.  We can assist you in determining whether you should file a tax appeal.  In addition to our work filing tax appeals in New Jersey, we also file tax appeals in many other states.  Please contact us if you would like to discuss tax appeals.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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