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For many, the start of a new year signals a time to make some kind of change in their lives and become more like their ideal self. For others, January marks the time to make a different kind of change, one that’s much easier to make: cut your property tax bill. The tax appeal process in New Jersey involves a series of steps and using an experienced property tax attorney to guide you through the process will make your New Year’s resolution much easier to stick to.

Since tax appeal season in New Jersey is towards the beginning of the year, lowering your property taxes is a perfect New Year’s resolution. Towards the end of January of each year, all New Jersey homeowners are supposed to receive their annual assessment. That’s the little green card that comes from the tax assessor’s office. Since all properties within a particular municipality in New Jersey are taxed at the same rate, it is the assessment that differentiates one property owner’s tax bill from another and is the true measure of whether a property is being taxed fairly. fair or not The period in which an evaluation can generally be appealed in New Jersey is from the time the evaluation is received until April 1 (May 1 if there was a reevaluation or reevaluation).

The first step to understanding if you are paying too much tax is to understand how your property is valued.

In New Jersey, your appraisal is the value your property was appraised at at the time of the last revaluation. Although the amount at which the municipality values ​​your property changes from year to year, your assessment generally remains the same. Each year, each municipality in New Jersey is assigned an “equalization rate,” which is intended to reflect the current value of properties in a particular municipality relative to their value in the year of valuation.

You can find your municipality’s compensation ration by calling your city tax assessor or county tax board. It can also be found on the New Jersey Division of Taxation website. The “average ratio” is the percentage of the “true value” that is considered to be your assessment. In other words, divide your appraisal by the compensation rate to get the actual valuation of your property. This is the number your assessor is actually using to calculate your property tax, not your assessment.

For many people, the decision of whether to appeal their appraisal is easy once they realize the true valuation of their property. For others, especially people who have owned a property for a long time and have not been thinking about buying or selling, the question of whether to appeal an assessment is less clear.

Here are several general rules to keep in mind when deciding whether to appeal your evaluation:

  • As your appraisal ages and your match rate decreases, there is a greater chance that your appraisal has deviated from the actual value of your property.
  • Conversely, when a leveling index rises above 100% because property values ​​have fallen (as has happened in recent years), that means that, on average, properties are overvalued in those municipalities. The property owner still has the burden of proving that his particular property is overvalued, but an average ratio of more than 100% is a good indicator of overvaluation.
  • When you live in a development or neighborhood where properties are very similar and prices have dropped significantly, chances are your individual property value has declined and your rate of assessment and matching may not have kept up.
  • Anytime a property has unique features that make it very different from those nearby, an assessment reduction is often warranted. For example, a very large older house in a neighborhood of smaller new houses will often be evaluated as a larger house with the characteristics of the surrounding areas. In fact, such homes tend to be harder to sell and often warrant lower assessments.

The next step in the process for individuals is to decide if they want to work with a lawyer in this process. While corporations and other legal entities must be represented by an attorney under New Jersey law, a sole proprietorship may represent themselves. However, there are very good reasons to consider retaining one:

  • Many attorneys work on a contingency basis, so there are no legal fees unless your taxes are reduced. There are certain fixed out-of-pocket costs that the property owner pays, but the attorney receives a percentage of the tax savings if and only if the appeal is successful.
  • An attorney working on a contingency basis should provide a free consultation and do their own independent investigation to determine if an appeal is likely to be successful. If an attorney doesn’t return calls and takes the time to tell you why she thinks her assessment should be lowered, that’s a signal to look elsewhere.
  • Above all, there is the convenience of having an experienced professional handle your case. You don’t have to worry about any of the rules that can be onerous and, frankly, arbitrary. (For example, property tax appeals may be dismissed if the petition is not on legal paper.) You are not required to testify at a hearing, which is often unfamiliar and uncomfortable for the owner.
  • Many people believe that you will get the best result when you are represented by an attorney. This additional year-over-year savings more than makes up for the attorney’s fees.

Take, for example, the case of Stephen and Rachel Pineles, who decided to appeal the appraisal of their home in Essex County, New Jersey, in 2010. “My town hadn’t had a reassessment in over twenty years and my appraisal was outrageously high compared to the actual rate. value of my home,” said Stephen Pineles. “Hiring an attorney to handle my property tax appeal was definitely the right decision for me. I didn’t have to worry about anything. Initially, the tax assessor offered a reduction that was quite low. In the end, my lawyer negotiated a much better settlement and my property taxes were reduced by over $3700 or almost 30% of my tax bill.”

As with anything else, there is some risk in appealing your assessment. In New Jersey, if your case is unsuccessful, you will not recover your out-of-pocket costs. Also, under New Jersey law, your appraiser has the right to argue that your appraisal is too low. However, this right is limited to cases where your property is undervalued by an extent of 15%. If your property’s appraisal divided by the match index is $100,000, the appraiser can only argue that the appraisal should be increased if he or she can prove that your property is actually worth at least $115,000. If your attorney has done their research well and determined that there is a good case for lowering your assessment, it is unlikely to happen.

As the new year begins, in addition to some of the more difficult goals and changes people are contemplating, it may be worth considering trying to lower your tax bill. It could be one of the easiest and most profitable resolutions you make.

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