Property taxes are the result of the local budget process and may not be appealed but the property’s assessment may be.

A taxpayer considering an appeal should understand that he/she must prove that his/her assessed value is unreasonable compared to a market value standard. By law, your current assessment is assumed to be correct. You must overcome this presumption of correctness to obtain an assessment change.

What is the basis for my assessment? An assessment is an opinion of value by a licensed professional. For an assessed value to be considered excessive or discriminatory, it must be proved that the assessment does not fairly represent one of two standards: 1. True Market Value Standard After a revaluation, all assessments in the municipality must be 100% of true market value as of October 1 of the previous year.

October 1 pre-tax year is the annual "assessment date.” All evidence for a tax appeal should precede the October 1st assessment date, especially property sales used for comparison. 2. "Common Level Range” Standard To explain the common level range you must consider what happens after a revaluation in your town is completed. External factors such as inflation, recession, appreciation, and depreciation cause values to increase or decrease at varying rates. Other factors such as physical deterioration may change property values. If assessments are not adjusted annually, a deviation from 100% of true market value occurs.

The State Division of Taxation, with local assessors assisting, annually conducts a statewide fiscal year sales survey, investigating most real property transfers. Sale value is compared to assessed value individually to determine an average level of assessment in a municipality.

An average ratio is developed from all bona fide, arm’s length property sales to represent the assessment level in your community. In any year, except the year a revaluation is implemented, the common level of assessment is the average ratio of the district in which your property is situated, and is used by the County Tax Board to determine the fairness of your assessment.

How do I know if my assessment is fair? In 1973, the NJ Legislature adopted a formula known as Chapter 123 to test the fairness of an assessment. Once the Tax Board determines a property’s true market value during an appeal, they are required to compare true market value to assessed value. If the ratio of assessed value to true value exceeds the average ratio by 15%, the assessment is reduced to the common level.

What is a tax appeal hearing; when may I appeal; who hears my appeal? Tax appeals must be filed annually on or before April 1st or within 45 days of the bulk mailing of the Assessment Notices; or May 1st where a municipal-wide revaluation or municipal-wide reassessment has been implemented. MORE INFORMATION ABOUT TAX APPEAL HEARINGS

fniemann@scarincihollenbeck.com