New Jersey Real Estate Attorney Blog
During the past five months, our office has responded to several hundred inquiries regarding real estate tax appeals for the 2016 tax year. The initial inquiries mostly concerned Monmouth County properties, where the filing deadline was January 15. A single exception exists for Wall Township properties, where the filing deadline has been extended to April 1, due to the municipal-wide revaluation. Wall Township is the only town in Monmouth County that had not previously undertaken a revaluation since the pilot program was instituted in Monmouth County in 2013.
The revaluation in Wall Township has, however, caused a great deal of confusion among taxpayers, many of whom have the erroneous belief that the drastic increase in their assessments would result in a significant increase in their tax bills. Fortunately, this is not the case. The tax rate for each town is calculated by dividing the municipal budget by total of all assessments. The former assessments, which had been equalized at about 60% of true value, necessitated a very high tax rate. Put simply, when all the properties in town were under-assessed, a higher tax rate was required to ensure that the tax revenue still matched the municipal budget.
Now that Wall Township has undertaken the task of bringing all the assessments back to 100% of true value, the tax rate would need to drop commensurately in order to make the arithmetic work. Of course, any time there is a municipal revaluation, there will be a few property owners who will become over-assessed. While a drastic increase in assessment is not sufficient cause to file a tax appeal, an over-assessment is a very good cause to file a tax appeal. During the next few weeks, our office will continue to field phone calls and emails to answer any questions that taxpayers may have regarding their assessments.
Outside of Monmouth County, we have received several calls from residents from Brick Township, Berkeley Township, Little Egg Harbor and Toms River in Ocean County, and calls from residents in New Brunswick, Edison and Woodbridge in Middlesex County. We note that many towns in Middlesex County are still equalized at a very low percentage of true value. For assistance in calculating your true value assessment for purposes of determining whether you have been over-assessed, please contact our office. Please also keep in mind that the filing deadline for Wall Township and all counties outside of Monmouth County is April 1. Our office will continue to accept appeals for Middlesex and Ocean County, as well as Wall Township and some tax Court matters through March 23. After that date, we cannot accept any new matters.
Finally, we note that the Freeze Act, which has historically protected property owners who have won their tax appeals from being re-assessed during the following years, is not applicable in the event of a revaluation. This exception to the Freeze Act has drawn a great deal of concern among many Monmouth County residents, who are concerned that there tax appeals will not provide them with the lasting protection that they would have had if the Freeze Act were applicable. Since the problem of annual revaluations is somewhat unique to Monmouth County, there is currently a steering committee with legislative proposal designed to partially freeze the assessments for taxpayers who win their tax appeals, and only allow for a percentage of increase in following years that would match the average increase in assessments that is imposed on the town. That proposal has not yet been approved by the State Legislature, which still needs to consider the wording of the Statute, as well as the benefits and detriments of such a drastic change in the law. There is also a plan allow some towns to “opt out” of the annual revaluation program. While we do not have a full list of towns that will be opting out, we anticipate that at least 12 out of Monmouth County’s 53 municipalities will be opting out.