Guide Sample

HOMEOWNER'S PROPERTY TAX DEDUCTION REVIEW GUIDE:

EXAMPLE TEXT USED IN THE COMPLETE GUIDE

WHY, WHEN AND HOW TO REVIEW YOUR ASSESSMENT

There are only two ways to lower your property tax bill. You can partake in the hallowed American tradition of complaining to your local officials that the property tax rate is too high, or you can attempt to lower your assessment. The former is easy but often ineffective; the latter is harder but offers a greater chance of success.

Homeowners who protest their assessments, with a knowledge of how the system works, get their assessment reduced the majority of the time without going beyond the local assessor’s office. The best advice this guide has to offer is go to your local assessor’s office and check your property record card for mistakes of fact. Clerical errors and plain mistakes do occur during the valuation process. This guide offers a list of twenty types of common mistakes you should check up on.

The annual assessment value is considered tentative during the period of public inspection of the new tax list occurring ten days before January 10th (see N.J.S.A.54:4-38). The purpose of the ten day inspection period is to enable the taxpayer to ascertain what assessments have been made against his or her property and to confer informally with the assessor as to the correctness of the assessments. This is so that any errors may be corrected before the assessment list is filed with the County Board of Taxation on January 10th. In any year in which your property assessment changes more than the annual rate of property inflation have an informal discussion with your assessor about your tax assessment before the tentative assessment period ends on January 10th. At this point, your approach can be informal and will not require a formal, written appeal.

You have an opportunity once each year to file your formal appeal. It must be received by the County Board of Taxation on or before April 1 of the tax year, or 45 days from the date the bulk mailing of Notification of Assessment is completed in the taxing district, whichever is later.

Find three properties comparable to yours. Any adjustments required to bring those three comparable properties into conformity with yours are always applied to the value of the comparable properties you have chosen to prove your case. They are never made to the value of the subject property. This technique changes the value of the comparable property so that when the values of those properties are compared to the subject property, it yields a better indication of relative value.

TAXABILITY OF RESIDENTIAL IMPROVEMENTS

List A below shows improvement and changes to your residential property that do not require adjustments and generally do not add to your assessed value (except, as noted, if they contribute to a major improvement in the overall physical condition of the residential property).

List B below shows elements that can affect your assessed value and are considered by the assessor when valuing a residential property for assessment purposes.

(List A) Residential Improvements That May Not Increase Your Assessment:

Inside the Residence Outside the Residence
New furnace Repairing masonry
Hot-water heater Roof replacement
Plaster repairs Repair of porch, steps, stairs
Painting, wallpapering Repair fire escape
Small closets or New window sashes & sills
built-ins Insulation
(FULL LIST IS SHOWN IN THE COMPLETE GUIDE.)

(List B) Elements That Could Affect Your Residential Assessment:

Structure (framing and foundation)
Overall quality of the property
Construction (frame, brick, stone, etc.)
Roof (type, slope, presence or absence of gutters/eaves)
Wiring for new fixtures and the fixtures (type and grade)
(FULL LIST IS SHOWN IN THE COMPLETE GUIDE.)

OTHER RESIDENTIAL ASSESSMENT REVIEW BASICS

OTHER REASONS TO CHALLENGE YOUR RESIDENTIAL PROPERTY ASSESSMENT

Improper classification of a property is a reason to challenge a residential assessment. All properties are assessed within their own class, such as residential, commercial, industrial, farmland, etc. Check to see if your property is properly classified as residential, and if there are subcategories within residential, and whether or not your property is classified under the right one. For example, there may be subcategories 1-10 under residential where category 9 may be houses that are 2,00 to 2,500 square feet and category 10 includes those larger than that. Yours may be category 10 when it belongs in category 9. In the valuation manual used by the tax assessor (called the Real Property Appraisal Manual for New Jersey) there are pictures of houses that fall within each such quality category. Your home may not even come close to the pictures shown for the category in which you have been assessed. If appropriate, check whether reclassification would lower your assessment.

SYSTEMATIC RESIDENTIAL ASSESSMENT REVIEW

Property owners do challenge assessments successfully---without help from experts.

Mechanical Errors
Many times you'll find miscalculations, clerical errors, and plain mistakes in the tax records that are used to determine your assessment. As discussed earlier, you will be checking for these types of situations when you inspect your property record card and other records used at the tax assessor's office.
Even if you don't agree with some of the cost factors or depreciation percentages or don't understand them, check your property record card for mistakes of fact.
Adjust the values of the three comparables relative to the subject property to arrive at an equitable assessment for your property. Make adjustments for the same items shown on the market analysis approach, e.g., size, baths, fireplaces, garages, air-conditioning, etc. Obtain current adjustment figures from a local Realtor or appraiser.

IMPROPER ASSESSMENTS AND KEY TAX APPEAL POINTS

KEY TAX APPEAL POINTS TO REMEMBER

Market value is the best indicator of value. Thus, if you use this approach and any other approach such as cost, more weight will be given to the conclusions reached using the market approach.

When gathering sales data, make sure that the sale was a "usable" one. Transfers of convenience, sales that convey only part of the property, sales to or from charitable institutions, transactions where the full consideration was minimal, etc., are examples of "non-usable" sales. Avoid using them.

The taxing jurisdiction can raise your assessed value as a result of your appeal, so be careful to analyze your data thoroughly before filing an appeal. Be certain that you aren't under assessed.

Before going to the County Board of Taxation or Tax Court of New Jersey with an appeal, obtain a copy of their rules by calling their offices.

GUIDELINES TO FOLLOW IN PRESENTING YOUR CASE

PRESENTING YOUR CASE TO THE ASSESSOR

Contact your local assessor by telephone and arrange for a time to discuss your case. When you meet, present your case in a conversational, relaxed manner. Assessors are not to be feared. They are hard-working busy people with strengths and weaknesses just like you.

There should be no confrontation, but merely a presentation of information by you that justifies your position.
Begin with an overview statements, such as, "I have a market analysis, some questions I'd like to ask, and some facts to review that will illustrate why I believe that my assessment is too high. Shall we begin with the set of questions?" This approach gives the assessor a feel for the direction you wish to take, yet it allows you to control the sequence of your presentation. Beginning with a series of questions is non-threatening and lets you both relax and break the ice.

Next, discuss any discrepancies or errors that you found.

Finally, you should present your market analysis data. You could briefly highlight how you arrived at the final values and conclude with the value at which you believe your property should be assessed.

Usually the assessor will tell you that he or she will look at your records and the data you presented and call you in a few days with an opinion. Rarely will a decision be given on the spot, even if one could be given. Don't let that bother you. It's routine.

When you and the assessor get back together, the assessor may offer to settle on a value that is higher than your facts indicate. You can try to negotiate further, but if you are unable to convince him to accept your figure, you must decide whether or not to settle for his higher valuation. Your alternative is to proceed to the County Board of Taxation. It might be better to accept a slightly higher valuation than to risk an even worse settlement later.

The assessor will usually prefer to make a settlement on his level rather than to have to justify the assessment --- in the presence of his superiors in a courtroom atmosphere at the County Board of Taxation hearing. You can always make another appeal the following year and perhaps achieve a more satisfactory valuation.

If you accept the decision, you will receive a notice of a reduction in assessed value within a week or two.

PRESENTING YOUR CASE TO THE COUNTY BOARD OF TAXATION

The county board consists of up to five people who are appointed by the Governor primarily to hear disputes involving assessments. The municipality is the opposing party and will be represented by the municipal attorney. The assessor and his appraiser may appear at your hearing as an expert witness for the municipality.

Before preparing your presentation obtain a copy, if available, from your county board of its Judgment Notification Form sent to the assessor and grievant after the review board makes its judgment. That form often contains a list of reasons for the judgment rendered by the county board. A grievant may be wise to emphasize in the appeal one or more of the reasons set forth in that list. The list usually contains items like: incorrect dimension, calculation error, depth factor, excess land calculation, comparable sales, zoning restrictions, easement, depreciation (physical and effective age), obsolescence (functional or economic), traffic consideration, odor consideration, over-improvement, mis-classification, and incorrect cost factor.

The county board, in most instances, will not make its decision immediately in your presence. Most likely, the grievant (that's you) will be notified directly of the county board's action.

JUDICIAL REVIEW

Once the results of the grievance at the local level are learned, a determination must be made whether or not you are satisfied with the decision. If you are not, you may carry the case to the Tax Court of New Jersey.
If you are requesting a reduction of at least 10 percent, you may want to proceed. This is purely a judgement call and legal counsel is advised.

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News You Should Know from New Jersey Legislature

HOMEOWNER'S PROPERTY TAX DEDUCTION REVIEW GUIDE:

EXAMPLE TEXT USED IN THE COMPLETE GUIDE

WHY, WHEN AND HOW TO REVIEW YOUR ASSESSMENT

TAXABILITY OF RESIDENTIAL IMPROVEMENTS

IMPROPER ASSESSMENTS AND KEY TAX APPEAL POINTS

GUIDELINES TO FOLLOW IN PRESENTING YOUR CASE

PRESENTING YOUR CASE TO THE COUNTY BOARD OF TAXATION

JUDICIAL REVIEW