Real Property Tax Appeals
At Scarinci Hollenbeck, we have been serving New Jersey taxpayers for many years and we are pleased to have been able to help many of our clients in this area. The firm has successfully litigated or negotiated numerous tax appeals on all classes of properties, as well as property tax exemptions that have been challenged.
What is the difference between a residential and commercial property tax appeal?
A commercial property tax appeal differs from a residential appeal in that the valuation of the property is derived from valuation methods different from those employed in a residential, non-income-producing setting. A commercial property tax appeal involves the appeal of the fully equalized value of property used for a business or income-producing venture. Please note that the law requires that a legal entity, as distinct from an individual, must be represented by an attorney. A legal entity cannot act on its own behalf in a property tax appeal.
What is the fully equalized assessed value?
In January of each year, the local property tax assessor provides you with an assessment card that lists pertinent information regarding your property. One of the items identified on the card is the taxable assessed value. Take caution - this is not the same as the fully equalized assessed value, or what some refer to as "True Value." Most likely, the value listed is a value that was assigned to your property the last time the town engaged in a revaluation of all properties within the municipality.
The State recognizes that over time, property values fluctuate with market conditions. Therefore, to arrive at a reasonable approximation of your property value, the State, in conjunction with the local property tax assessors, assigns a number called the "Director's Ratio" to each town. In order to calculate the true value, or fully equalized assessed value of your property, you must divide your taxable assessed value by the Director's Ratio for your town. When performing this calculation, please note that the Director's Ratio is a percentage.
My property appears to be over-assessed. Will you take my case?
The acceptance of your case depends on several factors. We will perform an analysis in consultation with an experienced appraiser to determine if it makes sense to pursue your case. You should be aware that State law provides a safe harbor for townships. In order to be eligible for reduction in your fully equalized assessed value, you must demonstrate that the fair market value of your property varies from the town's fully equalized assessed value by at least 15%.
To perform a property analysis, we will ask you for pertinent facts about your property to develop a better understanding of your value and analyze any factors that might influence its value, such as undeveloped portions, long-term vacancies, rent roll or other market conditions.
There is no simple formula to apply and each matter must be evaluated on its own merits. We perform this analysis for you at no charge. If we determine your property presents a proper case for appeal, you will be responsible for costs only, such as the cost of an expert appraiser and filing costs, but you will owe no legal fee unless and until we are successful on your behalf. Typically, the fee payment can be structured to receive payment out of the refund to be received from the Town so that there is no out of pocket expense to you, other than costs and expert fees.
My property appears to be over-assessed. Will you take my case?
We typically do not undertake representation in residential property tax appeals. The tax appeal process at the County level is designed to be simple and direct, enabling private residential property owners to represent themselves before the County Board of Taxation. There are instances in which we will represent a residential owner, but those cases are rare. If you feel you have such a case, please feel free to contact us.
To assist homeowners interested in filing tax appeals on their own behalf, the State has developed a brochure explaining the procedures. Click here to view a copy of the State's brochure.
Are there any deadlines for filing?
April 1 of the current calendar year is the deadline for filing most tax appeals. By April 1, appeal papers must be received in the appropriate offices. Simply mailing the papers by April 1 is not sufficient.
No municipality's deadline may be earlier than April, but in certain instances, the April 1 filing deadline may be extended as a matter of law, but no individual taxpayer will be granted an extension. If you are uncertain, it is a good idea to call your local property tax assessor and verify the date. If you miss the filing deadline, you cannot file your appeal for the current tax year and must wait until the following year.
My town has requested my income and expenses for my property. Do I have to do this?
You may have received a written request from the town for the income and expenses for your commercial property. The letter from the town encloses an expense statement form for you to complete and return. This request from the town is authorized by law and is commonly referred to as a Chapter 91 request. If your town has requested the income and expenses for your property, it is likely the town is preparing a revaluation of all properties in town. The forms delivered to you by the town must be submitted within the timeframe set forth in the accompanying letter and typically you have 45 days to respond.
You are not required to respond, however, if you fail to respond timely, and you file an appeal, the law permits that town to request dismissal of your appeal for failure to supply the information. You will then be required to pay your taxes in full for the revaluation year and will have to wait until the following year to appeal. In addition, you will not be able to recapture any overpayment made in the revaluation year.
Can I appeal an added assessment?
An added assessment is a notice from the tax assessor indicating that he/she has determined a change has occurred to your property warranting an increase in the taxable value. Usually, this is the result of the completion of an addition to a building, but it may also result from the installation of a rooftop cellular antennae or another change that is deemed to have created additional usable income-producing space within your building. An added assessment must be appealed within 90 days from receipt of the notice of added assessment or the right to appeal will be lost. This does not prohibit you from filing a regular tax appeal in a timely manner for your entire property. However, any amounts paid towards the added assessment in the calendar year prior to that regular appeal are not recoverable.
Are there any instances in which I can have prior years reviewed?
The instances for review of prior year payments are extremely limited. State law does allow for review in the event an Assessor's Card contains an obvious error. For example, if the card lists your property as containing ten acres when in fact you only have one, you might be entitled to recover overpayments in prior years based on this inaccuracy. There are, as you can imagine, restrictions and limitations on the rights to recover under the circumstances, but it is a possibility.