Tax Appeal

All real property in the State of New Jersey is valued each year as of October 1 of the pre-tax year. In New Jersey you have the right to file a property tax appeal on your real estate, whether residential or commercial. The value, known as the “assessment,” is determined by the municipal tax assessor. By law, your current property tax assessment is assumed to be correct. You must overcome this presumption of correctness to obtain an assessment change. A New Jersey taxpayer considering an appeal should understand that she must prove that her assessed value is unreasonable compared to a market value standard.

New Jersey requires you pay taxes based upon the fair market value of your property. Fair market value of the property is the price for which the real property would sell in an arm’s length transaction between a willing buyer and a willing seller. Every year, the Division of Taxation determines the ratio of assessed value to market value on an average basis for each municipality by utilizing sales data of preceding years.

To determine the assessor’s contention of implied value of your property, you must divide your assessment by the average ratio. Grounds for a tax appeal exist when an assessment is in excess of the implied value of the property.

To determine whether an assessment is in excess of the implied value of the property, a taxpayer would look for sales on or before Oct. 1 of the pre-tax year, and compare those with the implied tax value of their assessment. For example, if you are in a town where the ratio is at 50 percent, and your assessment is $500,000, the implied value of your property is $1 million. Therefore, if the fair market value of the property is $750,000 based on the sales on or before Oct. 1 of the pre-tax year, you might be paying too much in property taxes.

If you feel your New Jersey property taxes are too high due to an inaccurate assessment, you have a right to file a tax appeal to the tax board to seek a reduction of your property’s assessed value. If you need to speak with a New Jersey attorney about a tax appeal, we encourage you to contact our law office in Fort Lee, New Jersey. We can undertake a preliminary review of a potential tax appeal, but we will need a copy of the most recent Notice of Assessment (the post-card mailed to the property owner by February 1 of each year indicating the assessment) as soon as possible. We will share our findings with you and counsel you whether or not a tax appeal is appropriate.

The deadline to file a tax appeal for the 2010 tax year in most municipalities will be Thursday, April 1, 2010.

At Kim & Bae, P.C., we provide experienced legal representation for people and businesses throughout the State of New Jersey and we have successfully handled real estate tax appeals at the County Board and State Tax Court.