As a local REALTOR, I am often called on by a client to help guide them with a property assessment appeal. This process can be a hurdle as towns do not want to erode their tax base.
Some tips to consider offered by our state association of REALTORS:
- For most municipalities, the last date to file a tax assessment is April 1st. But each property owner should check with their municipality to determine what the last day is to file your assessment appeal. (For instance, the last day to file appeals in Middletown Township is May 1st.)
- Once you obtain the appeal forms and the important instructions which are attached, remember that your completed form needs to include what you believe your property is worthy based on at least three closed comparable sales.
- You must file a copy of the appeal papers with the municipal clerk, the local Tax Assessor and the County Board of Taxation. Hand carry the copy to the local Assessor and get proof that it was delivered.
- If the property owner wants an appraisal to support a tax assessment reduction, the appraisal report must be prepared by a licensed appraiser with the State of New Jersey and the appraiser must ultimately appear at a subsequent hearing to present testimony about the report and the comparable sales used. Corporations must be represented by an attorney.
- If you hire an appraiser for a residential or commercial property assessment appeal, they must be available to testify at your appeal hearing.
- Get a minimum of 3 closed comparable sales. Your comparables should ideally come from the January-October 1st, 2008 time frame. Closed sales before or after those dates may only be considered to be corroborative or may be thrown out altogether.
- Remember, one sale does not make a market, so don't hang your hat on just one sale.
- In addition to comparable sales, you may bring pictures, maps or other descriptive items which may further describe the subject property under appeal. For instance, if they claim you have an extraordinary view, and you don't, pictures can be helpful to support that.
- Remember, under law, your tax assessment is presumed to be correct. Therefore, the burden of proof is on your shoulders to present enough evidence and testimony to demonstrate that the assessment should be lower.
- Be persuasive with your information. Quantify why your property is worth less and provide evidence to back it up.
- For purpose of uniformity, your Tax Assessment was developed by the Assessor using the Cost Approach. The Market Approach (comparable sales) is usually the best approach to use unless the property under appeals requires another approach such as the Income Approach.
- Do not compare your assessment with your neighbor's assessment. It could be their assessment may be wrong. Do not offer testimony about how much you are paying in property taxes. This is irrelevant information. Stick to presenting closed comparable sales and persuasive reasoning as to why your assessment should be lowered.
- Try to find arm's length closed sales. Try not to use short sale transactions. But if you use a short sale as a comparable sale, be sure to disclose that information and support why you chose to use it. Be professional and transparent with your information.
- If the assessment represents what the property could have sold for on October 1st of the pre-tax year and comparable sales seem to back that up, then right now may not be the time to appeal.
- At a tax assessment appeal hearing, only the Commissioners need to be convinced that the assessment should be lowered.
- There can be a big difference in how to approach a tax appeal for a property if a revaluation has been completed or if the appeal being considered occurs in a non-revaluation year. Be familiar iwth the Chapter 123 formula.
- Familiarize yourself with Understanding Property Assessment Appeals from the Monmouth County Board of Taxation which explains Chapter 123 and includes other valuable instructions.