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Tax Appeal Basics

The recent increase in property taxes in some Ocean County towns has prompted an increase in calls to our office requesting more information on filing tax appeals. This article will address some of the most commonly asked questions about tax appeals.

The most important thing to understand about tax appeals is what you can and cannot appeal. Under New Jersey law, you can only appeal that the assessment for your property is in excess of the property's fair market value. The assessment is the municipality's determination as to the value of your property which is sent to each taxpayer around February 1 of each year in the form of a post card showing the property's address, tax block and lot and the assessment.

It is equally important to know what you cannot appeal. You cannot appeal the following: (1) the amount of taxes which you have to pay; (2) whether you can afford to pay the taxes; (3) that another person is paying less taxes than you; and (4) that the assessment of another property is less than yours. Thus, the County Tax Board can only hear appeals that the property's assessment is greater than its fair market value.

The municipal tax assessment is entitled to a presumption that it is correct. It is up to the taxpayer to prove that the assessment is too high. To do this, the taxpayer must present evidence to the Tax Board as to the correct fair market value of the property. This evidence should be in the form of sales of comparable properties which occurred on or before October 1 of the year prior to the filing of the appeal. Since most people do not know how to find such comparable sales, it is best to hire a State licensed or certified real estate appraiser to prepare an appraisal showing the comparable sales. The appraisal must be filed with the Tax Board no later than one week prior to the tax appeal hearing date. The appraiser should also be at the hearing to present the appraisal.

Taxpayers should be aware that the law gives the tax assessor a range of 15% in either direction, so that if true value as determined by the Tax Board is within the 15% range, the Tax Board may not change the assessment (the so-called "Chapter 123" test). The taxpayer should consult with the appraiser as to whether the comparable sales support a reduction in the assessment.

All tax appeals must be filed no later than April 1 of each year. Taxpayers seeking to file appeals should begin the process as soon as they receive the assessment card from the tax assessor. Because the laws and procedures regarding tax appeals are complicated, it is a good idea to retain the services of an attorney to assist you in filing and pursuing the appeal. Our office has a long history of obtaining reductions in tax assessments for our clients.