New Jersey Real Estate Attorney Blog
As another Tax Appeal season is upon us, we would like to thank our clients and our appraisers for a great season of tax appeals. For the 2016 tax year, we saved our clients more than $12 Million in tax assessments. Starting on October 5, 2016, our office will begin accepting tax appeals for the 2017 tax year. Since all final judgments in Monmouth County are under the cloud of the new Assessment Demonstration Program, the following information is essential for all Monmouth County residents.
Monmouth County’s Assessment Demonstration Program was implemented in 2014, ostensibly as a means of ensuring that all taxpayers are paying their fair share of property taxes. Under the new program, property tax assessments are revised annually to bring every assessment to 100% of true market value, as established as of October 1 of the pretax year. The program also includes provisions to allow for a 5-Year Data Collection Cycle, thereby increasing the frequency at which property data would be collected or verified.
By conducting annual revaluations, the County will effectively remove “fractional assessments.” All properties in Monmouth County will now be assessed at 100% of true market value. The old system of dividing an assessment by the town’s equalization ration to determine the true value assessment would, therefore, no longer be necessary in Monmouth County. Similarly, the arithmetic process of adding 15% to the equalization ratio to determine whether the assessment is within the “Chapter 123 corridor” is also not necessary. However, with annual revaluations comes a consequence for all taxpayers who had previously filed appeals.
One of the main byproducts of the Assessment Demonstration Program is the removal of the Freeze Act. Historically, taxpayers who have won their appeals can rest assured that their assessments will not be raised again for three years. The taxpayer would receive the reduction in assessment for the year of appeal, plus an additional two years following the appeal. However, one of the big exceptions to the Freeze Act is that it ceases in any cases where there is a municipal-wide revaluation or re-assessment. Since the Assessment Demonstration Program mandates annual revaluations, the Freeze Act will not be applicable in most Monmouth County towns. Please note that this is also the case for any town (regardless of the county it is in) in which a revaluation or re-assessment has taken place.
While lawmakers have tinkered with proposed legislation to find a way to keep the Freeze Act in effect during revaluation years, by applying formulas and percentages, no legislation to that effect has been adopted as of this date, and therefore, all taxpayers who won their appeals in 2015 or 2016 should be forewarned that in the event that a town conducts a revaluation or re-assessment this year, any previously awarded reduction in assessment is in jeopardy.
The good news is that some Monmouth County municipalities have already opted out of the assessment demonstration program. These towns include: Avon, Belmar, Eatontown, Manasquan, Marlboro, Millstone, Shrewsbury Borough and Wall. For residents of other towns, it is crucial that you check your 2017 assessments to determine whether they exceed the assessments from prior years. By November 1, most Monmouth County municipalities will have published their new tax assessments for all properties. All other counties should have their assessments published by January 15. This information is available through NJACTB, except in Ocean County, where you can obtain your assessment by checking with the Ocean County Tax Board’s website.
If your 2017 tax assessment exceeds the value of your property, please contact our office to determine whether we should file a tax appeal. If you have an appeal pending in Tax Court for a prior year, you will still be advised to file an appeal of your 2017 assessment in order to preserve your rights to obtain a reduction for that year. Please note, however, that if your total assessment is less than $1 Million, the 2017 appeal must be initially filed in the County Tax Board, before it can be appealed to the Tax Court.