A common question is how can property taxes be lowered? The answer is to file a tax appeal. In the current depressed real estate that the value of your home is often dramatically lower than the town has assessed it and you should appeal that assessment. In this economic climate, this is important to explore. A property tax appeal can drastically reduce your property tax payments. You can only appeal your tax assessment, i.e. the value the town assigns your property; you cannot lower your property tax rate.
To evaluate whether your property tax assessment is too high, first determine the fair market value of your property. Recent sales of similar properties in your neighborhood provide a good idea. Then you "equalize" your assessment to the fair market value of your property using your municipality's "equalization ratio." The equalization ratio is used to adjust for town-wide market fluctuations over time. Apply the equalization ratio to your assessed value to find the value the municipality has determined is the fair market value of your home (the "equalized market value" - this is usually not the same as the unequalized assessment in your tax bill). If the fair market value of your property is more than 15 percent less that the equalized market value, you should move forward with a tax appeal.
For example, let's say you live in Wayne, New Jersey, and believe your house is worth about $500,000. If it is currently assessed at $400,000, you might think your house is worth more than what the town has assessed it at and you are paying less than your fair share of property taxes. But this is not the case because the equalization ratio for Wayne Township is 51.28 percent and the equalized market value of your assessment is approximately $780,000. To apply the equalization ratio to your assessment, divide your assessed value by the equalization ratio, which results in the equalized market value. If the fair market value of your house is more than 15 percent less than its equalized market value, you would likely succeed in an appeal and save considerable money in property taxes each year.
The next step is to obtain an appraisal of your property by a certified appraiser willing to testify at a tax appeal hearing, if necessary. Submitting an appraisal with your tax appeal petition increases the likelihood of success. It is difficult to counter the county's assessment without the proof provided by an appraisal. A petition of appeal must be filed by April 1 or, if you receive your assessment notice after February 15th, within 45 days of its mailing. A hearing will then be scheduled by the county tax board, usually sometime in June or July.
McLaughlin & Nardi's attorneys are experienced in handling New Jersey real estate tax appeals. Call our Totowa law office at (973) 890-0004, e-mail us at firstname.lastname@example.org, or visit our website so we can analyze your assessment to determine if you would benefit from an appeal.