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Successful Tax Appeals Can Be Very Appealing

Posted on June 7th, 2010 | Author: Tim McKeown

Guest Blogger: Nick Pellitta

One obvious reason for filing a real estate tax appeal is to obtain a lower assessment on your real property and thereby save significant tax dollars.  An equally important reason to keep taxes low is to help maintain the value of the property making it more saleable in the event that the tax appeal is successful.

It would be wise to review the assessment on the property each and every year to see whether a tax appeal is warranted.  The problem is that most owners of industrial, commercial and apartment properties, as well as tenants under net leases, are not aware that they may be prime candidates for successful tax appeals even after looking at their new assessment.

Property owners often feel that their property is worth an amount equal to the assessment on the property.  This misconception leads owners to overlook the different ratios of assessed value to true value applicable in each of the assessing districts of New Jersey and to overlook the fact that these ratios generally decline each year.   For example, if a property worth one million dollars this year is located in a municipality with a 60 percent ratio, it should be assessed at $600,000 this year.  If that ratio drops to 54 percent next year, its assessment should be $540,000.  If the ratio drops, but the assessment remains high, it may be time for an appeal.

Another factor that may lead to an assessment error includes environmental contamination of the property.

Taxpayers with assessments in excess of $1,000,000 are allowed to file an appeal for direct review of their property’s assessed valuation with the Tax Court of New Jersey.  Tax appeals on assessments of less than $1,000,000 must first be filed with the county tax board.

The filing deadline for tax appeals each year is April 1st, except the filing deadline for properties in a revalued or reassessed taxing district is May 1st.