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Letting Property Owners Know They Can Challenge Annual Tax Assessments

Legislation aims to raise awareness of April 1 deadline for challenging accuracy of valuations

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New Jersey property tax bills are notorious for being the highest in the nation – and some property owners may be paying even more than they really should. But many property owners are unaware that they can challenge their assessments and wind up with a lower tax bill if they meet an April 1 deadline.

A bipartisan bill passed unanimously by the Assembly Housing and Community Development Committee yesterday seeks to increase awareness of the April 1 deadline by mandating that it be listed in boldface print on property tax-assessment notices mailed to property owners at the beginning of each year.

“There's nothing worse than realizing your opportunity to challenge your property taxes was lost in the fine print," said Assemblyman Raj Mukherji (D-Hudson). "This helps protect a homeowner's right to appeal."

The push to raise awareness for property tax appeals comes as hundreds of thousands of New Jersey homeowners have been facing pressure in recent years from two ends of the property tax equation.

The average New Jersey property tax bill has been steadily increasing, rising to $8,353) last year, according to figures released earlier this month by the state Department of Community Affairs.

State funding for direct property tax-relief programs has remained flat for the last several years, meaning the tax-relief programs haven’t kept pace with the rising bills, including the nearly $200 hike that occurred on average in 2015.

The proposed budget Gov. Chris Christie put forward last week for the fiscal year that begins July 1 would continue the trend. Christie’s $34.8 billion spending plan slightly decreases funding for programs like the Homestead Benefit, which provides tax rebates for more than 650,000 low- and moderate-income homeowners, including seniors and the disabled . Thousands of New Jersey homeowners have filed appeals with their county Board of Taxation. Last year, a little more than 60,000 tax appeals were filed, down slightly from the 69,000 submitted the year before, according to the state Division of Taxation.

David Wolfe, an attorney with the Livingston-based law firm Skoloff & Wolfe who specializes in tax appeals, said increasing awareness among property owners about the appeals process and the April 1 deadline (it’s a month later for towns where a reassessment or revaluation has just occurred) is a needed step.

“I think it’s essential for property owners to examine whether they’re paying more than their fair share of taxes,” Wolfe said.

But he also warned that property owners need to do some homework before launching an appeal because once the process begins it can result in a county Board of Taxation determining that an assessment is actually too low – bringing on a higher property tax bill.

Generally, two key factors – the assessed value of the property and how well that assessed value matches market values in the community -- must be looked at when considering a tax appeal.

Statements of the assessed value of a property are usually mailed in late January or early February.

The state is responsible for setting a ratio each year that takes into account assessed values and true-market values in every town.

To get a sense of whether a tax assessment is solid, property owners can use the assessed value for their property and the state’s ratio for their town to compare the valuation against recent home sales in their neighborhood. For commercial property owners, the analysis involves a comparison of lease rates.

During a tax-appeal hearing, the burden is on the person lodging the appeal to demonstrate that the assessment is too high.

When the last recession took hold and real estate values plummeted, New Jersey property owners filed appeals at a record rate – the highest in the last two decades. More than 116,000 appeals were filed in 2012, and nearly 106,000 were filed in 2013. Though fewer appeals have been filed in recent years, the volume is still much higher than a decade ago, when there were 22,409 appeals.

Even as property values have started to rebound in many areas of the state, Wolfe, the property tax attorney, assessments can still be too high. He said his firm handles many successful challenges each year.

Meanwhile, lawmakers in Trenton said raising awareness about the April 1 deadline for appeals remains a key goal.

“It is easy to disregard the assessment notice since it's not a bill,” said Assemblyman Joe Lagana (D-Bergen). “Highlighting the deadline helps ensure homeowners don't accidentally miss it.”

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