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If you own property in New Jersey, you probably just got some bad news in the mail in the form of your 2014 property tax assessment.  Before you angrily toss it in the trash, file it in “deal with later,” or even give it a celebratory pin on the ol’ bulletin board, there are a few important things you need to know.

Your tax assessment is set by the municipal tax assessor and represents the basis for your piece of the local tax levy.  Each town, each school district, each fire district, each library district and the County decide each year how much to spent.  How much of that you have to pay is based on your assessment.  The taxes you actually pay are the sum of (assessment) X (the tax rate).  The assessment is based on the value of your property – which you can try to correct through a tax appeal.  The tax rate is set by each governing body – which you can try to correct in other ways.

Here’s a 90 second version of the basics:

Your “assessment” isn’t necessarily supposed to be the value of your property.

The first thing you need to get out of your head is the idea that your property tax assessment has a direct 1:1 relation to your property value.  Most municipalities assess at a percentage of true value (called the “director’s” or “equalization” ratio), and while your assessment might be the same as last year – the percentage usually isn’t.  Ewing for example is assessing at about 67% of true value for 2014; Hamilton 61% and Hopewell Township – 102%.  (A full list of all of the equalization ratios can be found here).  Your $100,000 assessment in Ewing means the assessor has pegged your property not at $100,000 in market value – but closer to $150,000 ($100,000 assessment divided by the .67 director’s ratio). Hopewell Township, about $98,000 ($100,000 assessment divided by the 1.02 director’s ratio).  Check your town’s ratio and do some math to see what the assessment really means.

If your town has done a revaluation – like Lawrence just did – forget the ratio.  In Lawrence, $100,000 really does mean $100,000 this year.

Even if the true value of your property is less than your assessment, you may still not be eligible for a reduction.

Your property is worth less than the equalized assessment?  Time for more math, I’m afraid.  In years that are not revaluation years (i.e., not Lawrence), in addition to needing to “equalize” your assessment to turn it into real dollars, you need to also see if your assessment falls outside of the “common level range”.  The common level range is a 15% buffer window that the town gets on either side of the equalized assessment – and basically, if the value of your house falls within that 15% range, you’re outta luck when it comes to reducing your assessment through a tax appeal.  Painful – but your home could be overassessed and there might not be a thing you can do about it.

April 1st is the important date (but not always!).

Generally in New Jersey, tax appeals need to be filed by April 1.  Two exceptions.  First, Monmouth County (thankfully this isn’t “MonmouthMe” – or this story would be about two months too late!) is taking part in a pilot program that changed the appeal date to January 15th.  Next year that program may expand to two more counties – so keep an eye out!  Second, towns like Lawrence where a full revaluation was done, get an extra month (until May 1st) to file.

You can’t appeal the tax rate, but if your tax assessment is too high for the true value of your property, a tax appeal might be the way to go.

Questions?  Speak with an attorney, your tax assessor or the county board of taxation for the next steps, and see if a tax appeal makes sense for you.  While I am an attorney (and a tax appeals attorney to-boot) the views expressed in this article are solely intended for general informational purposes and do not constitute legal advice. For legal advice or representation in connection with real estate tax appeals, I urge you to consult with an attorney.

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