For many, the start of a new year marks the time to make some kind of change in their lives and to be more like their ideal selves. For others, the month of January indicates that it is time to make a different change, one that is much easier to make: reducing their property tax bill. The New Jersey tax appeal process includes a number of steps and the use of an experienced property tax lawyer to guide you through the process. will make this New Year's resolution much easier to keep.
Since the New Jersey tax appeal season is approaching the start of the year, reducing your property taxes is a perfect New Year's resolution. Towards the end of January each year , every New Jersey landowner is supposed to receive their annual appraisal. It is the little green card that comes from the taxpayer's office. Since all properties in a particular municipality in New Jersey are taxed at the same rate, this is the assessment that differentiates one property owner's tax bill from another and is the real measure of whether a property is taxed fairly or not. The period during which a New Jersey appraisal can generally be appealed is from the time the appraisal is received until April 1 (May 1 if there has been re-evaluation or re-evaluation).
The first step to understanding if you are over-taxed is to understand how your property is assessed.
In New Jersey, your appraisal is the value at which your property was appraised during the last reassessment. Although the amount at which the municipality assesses your property changes from year to year, your assessment generally remains the same. Each year, each municipality in New Jersey is assigned an "equalization ratio," which is intended to reflect the current value of properties in a particular municipality relative to their value in the year of the appraisal.
You can find the equalization ratio for your municipality by calling your city's taxpayer or the county tax office. It can also be viewed on the New Jersey Taxation Division website. The "average ratio" is the percentage of "real value" that your appraisal is deemed to be. In other words, divide your valuation by the equalization rate to get the true valuation of your property. This is the number that your appraiser actually uses to calculate your property tax, not your appraisal.
For many people, the decision to appeal their appraisal is easy once they have completed the actual appraisal of their property. For others, especially people who have owned a property for a long time and have not thought about buying or selling, the question of whether to appeal for an appraisal is less clear.
Here are several basic rules to take into account when deciding to appeal your assessment:
- As your appraisal ages and your equalization rate decreases, it is more likely that your appraisal will not match the true value of your property.
- Conversely, when an equalization ration exceeds 100% because the value of properties has fallen (as they have done in recent years), this means that on average, the properties are overvalued in these municipalities. The property owner still bears the burden of proving that their particular property is overvalued, but an average ratio of more than 100% is a good indicator of overvaluation.
- When you live in a subdivision or neighborhood where properties are very similar and prices have dropped significantly, the value of your individual property has likely decreased and your appraisal and equalization ratio may not have not be keeping pace.
- Whenever a property has unique characteristics that make it very different from those nearby, it is often necessary to reduce the assessment. For example, a very large old house in a neighborhood of smaller and newer houses will often be assessed as a larger house with the characteristics of the surrounding areas. In fact, these homes tend to be more difficult to sell and often warrant lower valuations.
The next step in the process for individuals is to decide if they wish to work with an attorney in this process. While corporations and other legal entities must be represented by an attorney under the law of New Jersey, an individual owner can represent himself. However, there are very good reasons to consider keeping one:
- Many lawyers work on a contingent basis so that there are no legal fees unless your taxes are reduced. There are certain fixed disbursements that the owner pays, but the lawyer receives a percentage of the tax savings if and only if the appeal is allowed.
- A lawyer working on a contingency basis should provide free consultation and do their own independent research to determine if an appeal is likely to succeed. If a lawyer does not return calls and takes the time to tell you why he thinks your assessment should be reduced, this is a signal to look elsewhere.
- Above all, there is the convenience of having an experienced professional to handle your case. You don't have to worry about any of the rules which can be cumbersome and, frankly arbitrary. (For example, property tax appeals can be dismissed if the petition is not printed on legal paper). You don't have to testify at a hearing, which is usually unfamiliar and uncomfortable for the owner.
- Many people believe that you will get better results when you are represented by a lawyer. This extra saving, year after year, more than offsets attorney fees.
Take for example the case of Stephen and Rachel Pineles, who decided to appeal the appraisal of their home in Essex County, New Jersey in 2010. "My town hadn't suffered re-appraisal for over twenty years and my appraisal was shockingly high compared to the real value of my home, "said Stephen Pineles. "Hiring a lawyer to handle the property tax appeal was definitely the right decision for me. I didn't have to worry about anything. much better settlement and my property taxes were reduced by more than $ 3,700, or almost 30% of my tax bill. "
As with anything else, there is some risk in appealing your assessment. In New Jersey, if your case fails, you will not get your personal expenses back. Also, under New Jersey law, your appraiser has the right to argue that your appraisal is too low. This right is however limited to cases where your property is undervalued by 15%. If the appraisal of your property divided by the equalization ratio is $ 100,000, the appraiser cannot claim that the appraisal should be increased only if he can prove that your property is worth really at least $ 115,000. If your lawyer has done their research and has determined that there are good reasons to reduce your assessment, it is unlikely to happen.
At the start of the new year, in addition to some of the more difficult goals and changes that people are considering, it may be worth considering reducing your tax bill. It could be one of the simplest and most cost-effective resolutions you can take.