NJ Property Owners Filed Tax Appeals Last Year at Near-Record Pace

While number was second-highest ever, volume of appeals appears to be down considerably this year

As New Jersey’s economy and housing market struggled to recover from the recession in 2013, property owners filed a near-record of more than 100,000 tax appeals, winning an average reduction of $40,093 in assessed valuation and a proportionate tax cut.

The volume of tax appeals last year was second only to 2012, when property owners filed 116,000 appeals — the highest number since at least 1990 — that led to a total value reduction of $4.7 billion, or 10 percent of the original assessed value of the properties appealed, which amounted to $40,173 on average.

In at least some parts of the state, however, tax appeals have dropped considerably in 2014.

Last year’s 105,844 appeals led to a $4.2 billion reduction in assessed property values, or 9.7 percent. There were about 87,000 appeals in 2011, the third-largest amount since 1990, with $3.8 billion in reduced value.

In contrast, there were fewer than 20,000 appeals each year between 2001 and 2005.

The $44 billion in assessments appealed in 2013 represented about 5 percent of the total value of taxable land in the state — $971 trillion.

With the improvement in the housing market, some county tax officials reported they have had fewer appeals this year than in 2012 or 2013.

“It’s always a function of the market,” said Don Kenny, the Hudson County tax administrator. The number of appeals filed this year was about 6,800, compared with almost 8,300 last year, he said. “Over the last five years, our tax base has gone down a bit, not a huge reduction, and always offset by new development.”

The number of appeals this year also dropped in Atlantic County, from nearly 14,000 in 2013, the most of any county in the state, to just under 9,000, said Keith Szendrey, assistant to the Atlantic County tax administrator. In both years, about 4,000 appeals in Atlantic City alone have driven the number countywide.

“Atlantic City was revalued at the top of the market so typically the values there are high,” Szendrey said. The city is looking to do another revaluation to try to correct those overly high assessments “in recognition that it has given away substantial settlements because of the appeals.”

This year’s appeals, typically due by April 1, are only now making their way through the system. Roughly half are settled by municipal tax officials without a hearing. County tax boards meet to resolve the rest.

A successful appeal helps an individual home owner pay less in property taxes, but can have a negative effect on a municipality’s tax base and lead to a higher tax rate — and, thus, higher tax bill — unless offset by additional development or higher assessments elsewhere.