Property Tax Appeal Deadline Approaching – What You Need to Know
Saturday, March 9, 2013 • 8:14am
MILLBURN, NJ - Local residents are facing an impending deadline for appealing the assessed value of their home and an opportunity to attempt to reduce the amount they are paying for local property taxes each year. In most cases, property tax appeals can be filed between January 1 and April 1 of each year. There are certain circumstances when taxes can be appealed until May 1.
Here is a video of my recent conversation with attorney, Evan Drachman, regarding tax appeals:
In order for the municipality to charge taxes against a property, they apply the municipal-wide tax rate to the property’s assessed value. The assessed value is the value placed on the property by the municipal assessor. Although the value of a property fluctuates every year, the assessment does not. Instead, the municipality applies a ratio to the assessment that converts the assessed value into a market value. This ratio is known as the average ratio or common level range. Applying the ratio to your assessment will tell you how much the municipality thinks your property is worth.
In addition, the township has a 15% window in which it is allowed to be wrong. In order to prosecute a successful appeal, it is not enough to be able to prove that your property is over-assessed, but rather you must prove that your property is over-assessed by at least 15%.
When filing a tax appeal, it is best to include as many comparable properties that closed title between January 1 and October 1 of the prior year. Generally, estate sales, short sales and other ‘distressed sales’ are disallowed as evidence and only arms-length transactions are considered. Discussing the current market value of your home with a local realtor or hiring a home appraiser can help with the determination of the estimated value of a home.
The process can often take a few months from filing to resolution. At the time of the hearing, the taxpayer will have to retain an expert witness – often an appraiser – to provide testimony on the comparable properties and the value of the property.
There is some risk associated with attempting to appeal your property taxes. According to Evan Drachman, a local real estate attorney and Partner at Dollinger and Drachman, “If a taxpayer does not have a successful tax appeal, it is possible the municipality will argue the value of the property should be increased. This would raise the taxes of the taxpayer. This is the most significant risk in moving forward with a tax appeal without first examining as to whether a tax appeal is proper. Our firm always does our preliminary investigation to determine if a tax appeal is appropriate so that we do not have tax appeals filed which would end up raising our clients’ taxes.”
Mr. Drachman added, “Homeowners can determine if they are eligible for a tax appeal with some quick (and easy) math. If they know their assessed value and have an idea of what their house is worth, the formula is simply (assessed value) divided by (market value). That number should then be multiplied by 100. Once a taxpayer has that number, they can compare it to their municipality’s common level range (simply do an internet search for “Chapter 123”). If the number is higher than the upper limit, the home owner should file a tax appeal.”
Evan Drachman is a real estate attorney and partner with Dollinger Drachman, located at 293 Eisenhower Parkway Suite 310, Livingston, NJ, www.DollingerDrachman.com.
Shannon Aronson is a Sales Associate with Keller Williams Premier Properties, located at 488 Springfield Avenue in Summit, NJ, and 518 Millburn Avenue in Short Hills, www.ShannonAronson.com and licensee with The Alternative Press.