Tax appeal deadline is April 1; we tell you how to file
PHOTO BY JAIMIE WINTERS/STAFF
BY JAIMIE JULIA WINTERS
The April 1 deadline to file a tax appeal on the value of your home and property is approaching.
By New Jersey law, homeowners can not appeal property taxes, but can appeal property assessment, which in the end correlates to how much their tax bill is. A successful appeal proves the assessed value of a home is unreasonable compared to the true market value standard. To do this homeowners must present recent sales, not assessments on homes.
A successful tax appeal could result in lowering your property taxes.
Last year the tax rate was 3.146. The township’s 2018 tax rate was 3.094. In 2017, prior to a townside reassessment, the tax rate was 3.734. The 2017 revaluation was aimed at doing three things: update properties’ assessments to their true market value, redistribute the tax burden equally and limit the number of tax appeals. Prior to the revaluation, Montclair had an equalization factor of about 80 percent, meaning that homes were assessed at 80 percent of their market value and were lagging behind actual sale prices on properties.
NUMBER OF TAX APPEALS
Since the assessment, more homeowners are filing tax appeals.The number of tax appeals filed by homeowners increased by 418 percent, from 32 in 2017 to 166 tin 2018. Commercial tax appeals increased from 26 to 38 in 2018.
In 2016, 69 homeowners filed tax appeals, while 37 commercial tax appeals were filed.
The number of total tax appeals in 2019 was 101.
WHAT TO EXPECT
During an appeal, the county tax board determines and compares the true market value to the assessed value. If the ratio of assessed value exceeds the average ratio by 15 percent, the assessment is reduced to the common level. If the assessed value falls below, then the board must increase the assessment to the common level. If the assessment falls within the range, no adjustment is made.
1. Get the Packet
Begin by downloading a packet on the Essex County Tax Board Web site. A Comparable Sales Form/SR-1A for listing your comparable homes is available on the site, as well. All municipal taxes must be up to date in order to file an appeal.
2. Get your comps
You will need to come up with at least four comparable sales, or comps of recently sold properties that are nearby and similar enough to your property to be used as a basis of comparison for assessed value. These sales must have occurred before Oct. 1, 2019.. Comps can be accessed on Trulia and Zillow. You can do a search by town and price range. The comps should have comparable characteristics to your home, including similar square footage, similar lot size or acreage; in the same area of your property; have the same zoning use, similar age, number of bathrooms and bedrooms and style of structure.
3. Do the comps line up with your home?
Once the comps have been found, you need to get the assessment records on the comp properties and your own. Those records are accessible at Monmouth County Property Tax Search Site and also through the local tax office, with the lot and block number. The property card will list the number of bedrooms and bathrooms, lot size, garage, square footage of the home, year built and all recent transactions on the home such as sales, transfers and reassessments and those dates.
According to the county board of taxation, a good comparable sale should be as close as possible to the property you are appealing, sold recently but prior to Oct. 1 of the pre-tax year, been on the real estate market for a “reasonable length of time” so that the market is determining its value; and not sold “at arm’s length,” meaning both the buyer and seller were motivated and neither party was acting under duress.
4. Watch for Non-usable comps
The property cards will also list a code under sales that will appear as “NU#.” If there is a number next to NU (“Not Useable”), the tax assessor will argue that the home cannot be used as a usable comp. State statute lists 33 reasons why a comp is unusable as evidence in a tax appeal. Those codes are listed in the tax appeal packet on Essex County’s Website. Short sales or sales between family members are examples of non-useable sales.
5. Gather copies of deeds
Deeds should also be included as evidence with the comps. Furthermore, some non-useable comps may be argued by accessing the deed to the property and by calling the real estate agent who handled the sale. The deed and the real estate agent could counter that the sale was not a short sale or “made under duress.” Deeds can be requested from the county tax assessor’s office.
6. A picture is worth a thousand words
Also include photos of your property and the comps, either taken by you or retrieved off of Trulia or Zillow.
7. Time to file
Once you have all your paper and forms together, you will need 7 copies. File the appeal with the town clerk (one copy), tax assessor (one copy) and the county (five copies). Include a check for filing fees of $50-$150 based on value with the county forms.
8. What’s next?
A tax board has three months from the date of the filing deadline to hear and determine all appeals and issues a judgment.
The municipal tax assessor could either counter with an offer lowering your assessment or set a hearing date to argue the appeal using his or her comps. A hearing can be avoided if a settlement between the attorney, assessor and taxpayer is reached in advance, and the board approves the stipulations.
9. Preparing for a hearing
If a hearing date is set, the town will notify you of the date by letter and include the comps the tax assessor will use to counter your comps. Retrieve the property cards of the town’s comps. You could argue that the assessor’s comps are different type properties, are not in your neighborhood, have more bedrooms or could be non-useable due to the codes.