New Jersey law provides exemptions from property taxes for properties used for a wide variety of activities beneficial to society. A non-profit organization whose purpose is categorized as tax-exempt by New Jersey law may be eligible for a property tax exemption, provided the property is actually used for that purpose and the activity on the property is not conducted for profit.
For example, exempt activities of a religious organization may include:
There is no minimum level of exempt activity required to obtain an exemption. However, a building is generally required – exemptions are not available for vacant land alone in most cases. However, if there is a qualifying building, up to five acres of land associated with that building is entitled to exemption from property taxes.
Don't Miss the Deadline
It's important to remember that all the criteria for property tax exemption must be in place on October 1 of the year before the exemption will take effect. For example, the exempt organization must hold title to the property as of October 1, 2021 in order to be eligible for an exemption for property taxes in tax year 2022.
To apply for exemption, the organization files form I.S. (available on the New Jersey Division of Taxation’s website HERE) with the local tax assessor. This form should be filed by November 1 of the year before the organization is seeking tax exemption. The form requires the organization to identify itself and the basis of the claimed property tax exemption.
Thereafter, the organization files form F.S. (available on the New Jersey Division of Taxation’s website HERE) every three years to maintain its exemption. A tax assessor may also request documentation at any time to verify the organization’s right to continue its exemption.
It's important for an organization seeking an exemption to make a convincing case to the tax assessor on this form. It’s the quickest and easiest way to obtain an exemption, though it’s not the only way. If you miss the deadline, or if the tax assessor denies your application, you can file a tax appeal in the following year. If the county board of taxation or Tax Court decides that your organization qualifies for an exemption, it will apply for the tax year in which you appeal. You will need an attorney to represent you in the appeal, however.
The Englert Law Firm, LLC, can help you put your best foot forward to obtain a property tax exemption. For help preparing your initial statement, further statement, or to file an appeal from an adverse exemption decision, contact us today.
New Jersey tax assessors often send information requests to real estate owners in their town. These requests could look like anything from a form letter to a complex form. Regardless of the form, it asks for leasing information, expense details, and particularized property descriptions. Commonly called “Chapter 91” requests, responses to these requests are time-sensitive, can affect your right to appeal your property tax assessment, and should not be ignored. I’ve counseled clients on such requests many times during my 15 years of practice in this field. Accordingly, here are a few answers to some common questions about these requests.
WHAT IS A CHAPTER 91 REQUEST?
A Chapter 91 request is made by your local tax assessor for information about your property. In general, assessors ask about how much rent you get from the property, and how much it costs to operate.
WHY AM I RECEIVING A CHAPTER 91 REQUEST?
A Chapter 91 request is supposed to help the assessor set your property’s tax assessment correctly. Because many properties are valued based on how much rent they generate, the requests focus on your income from tenants.
WHO CAN GET A CHAPTER 91 REQUEST?
Chapter 91 requests usually go to the owners of commercial property like offices, stores and apartments. It is rare for the owner of a single-family or multi-family home, or vacant land to receive such a request. However, Chapter 91 requests can be sent to any property owner in New Jersey. Thus, your appeal rights may be affected if you don’t respond in time, no matter your property type.
WHO HAS TO RESPOND TO A CHAPTER 91 REQUEST?
The law requires every owner of real estate in New Jersey to give an account of his name, property, and its income on receipt of a proper request from the tax assessor. However, the part of the law that can affect your ability to challenge your property’s tax assessment only applies to “income producing property”. This means that owner occupied property may be excused for failing to respond to a Chapter 91 request. This is true even if the property is used to make money in some other way. However, it’s not always easy to tell which category fits your situation.
HOW CAN I TELL IF MY PROPERTY IS INCOME PRODUCING?
In general, if the owner of a property occupies it and does not rent it to another person or business, the property is owner occupied. However, if the owner of the property and the business operating at the property are different, the property will not be considered owner occupied. This is true even if there is no lease, no rent paid, or if the rent is not a “market” rent. Also, even if only a small part of the property is rented, or if it is rented for only part of a year, the property is not owner occupied. If the court finds your property is income producing, even if you don’t receive rent or have a tenant, your appeal right may still be affected. When in doubt, the best option is to respond to the Chapter 91 request if you want to ensure you’ll be able to challenge your assessment.
WHEN ARE CHAPTER 91 REQUESTS SENT TO PROPERTY OWNERS?
Chapter 91 requests are usually sent in summer or fall. They could be sent any time during the year. However, the assessor must send them at least 45 days before January 10, when assessments must be finalized. Often, if the town is doing a revaluation, property owners can expect to get a Chapter 91 request in the time leading up to when the revaluation is put into effect.
HOW LONG DO I HAVE TO RESPOND TO A CHAPTER 91 REQUEST?
New Jersey law requires the taxpayer to respond to the Chapter 91 request within 45 days of the request. A late response is considered a non-response. So, if your response is received on the 46th day, you can lose your right to challenge the assessment.
WHAT HAPPENS IF I DO NOT RESPOND TO A CHAPTER 91 REQUEST?
If you own income producing property and do not respond to a Chapter 91 request within the 45-day period, you can lose the right to challenge your assessment in all but the most extreme circumstances for the tax year after the request is made. For example, if a Chapter 91 request is sent in 2022 and you fail to respond, your appeal rights for your 2023 assessment are at risk.
So, while you may still file an appeal, the town can ask the court or county tax board to limit your appeal to the “reasonableness” of the assessment. Past challenges to an assessment’s “reasonableness” have almost never succeeded.
In addition to losing your right to appeal, the law allows the assessor to use any information available to set your assessment. The result may be an excessive property tax assessment that you can’t challenge.
HOW SHOULD I RESPOND TO A CHAPTER 91 REQUEST?
The best way for you to respond to a Chapter 91 request will depend on your property’s situation. In some cases, a simple letter may be a sufficient response. In other cases, more information may be necessary, or even helpful. There can also be situations where the best response is no response.
No matter the particulars of the response, however, you should always keep a copy of the town’s request, including the envelope and a copy of your response. You should also send the response by trackable means, including delivery confirmation.
I RECENTLY CHANGED MY MAILING ADDRESS. CAN I STILL LOSE MY RIGHT TO APPEAL?
Yes. It is the taxpayer’s obligation to advise the tax assessor of a new mailing address for Chapter 91 requests.
I RECENTLY PURCHASED A PROPERTY. CAN I LOSE MY RIGHT TO APPEAL BECAUSE THE PRIOR OWNER DID NOT RESPOND TO A CHAPTER 91 REQUEST?
Yes. When a property owner fails to respond to a Chapter 91 request, it can affect a buyer’s right to challenge the next year’s assessment. If you are buying real estate in New Jersey, you should consult with your attorney to make sure that any Chapter 91 request is given a proper response.
THE CHAPTER 91 REQUEST IS ASKING FOR TOO MUCH INFORMATION! DO I STILL HAVE TO RESPOND TO A CHAPTER 91 REQUEST?
Yes. Even if the request is too broad, your appeal rights can be limited unless you, at minimum, respond to the parts of the request that aren’t objectionable and tell the assessor why you think the rest of the request is improper.
I DON’T HAVE THE INFORMATION THAT THE ASSESSOR IS LOOKING FOR; DO I STILL HAVE TO RESPOND TO THE CHAPTER 91 REQUEST?
Yes. Even if you don’t have some or all the information requested, you should still respond. For example, if the assessor requested information for the current or prior year that is not yet complete or finalized, you should still respond and provide the most recent information and explain the reason the requested information is not available.
I WASN’T ABLE TO RESPOND IN TIME. IS THERE ANYTHING I CAN DO?
Maybe. If you don’t respond at all, file a tax appeal and your town tries to have your appeal limited, it will be too late. In such a circumstance, the court found that even a property owner’s death was not sufficient justification for his elderly widow (who also suffered from Lou Gehrig’s disease) to fail to contact the assessor in the 45-day time period. However, if you just missed the deadline, the law allows a local county tax board to set terms for the property owner to provide the information if they can show good cause for failing to respond in time.
I RECEIVED A CHAPTER 91 REQUEST AND I’M NOT SURE HOW TO RESPOND, OR EVEN IF I SHOULD RESPOND. WHAT DO I DO?
If you’ve received a Chapter 91 request, you should contact an attorney experienced in property taxation. The Englert Law Firm, LLC uses its experience opposing motions involving Chapter 91 to help clients craft the most effective responses. We can help you decide whether it is in your best interest to respond, and how best to respond.
Jersey City recently authorized its Tax Collector to mail out estimated property tax bills that include a significant rate increase. How significant? The rate was raised up to $1.889 per $100 of assessed value, from $1.604 per $100 in 2021.
According to the Division of Taxation, the average residential assessment in Jersey City in 2021 was $461,925. At last year’s tax rate, that assessment would yield an annual tax bill of about $7,400. With the new tax rate, that same property owner would pay about $8,700 annually, an increase of about $1,300, or almost 18%!
This will also hit homeowners hard this year, because the first two quarters are calculated based on the previous year’s taxes, meaning less was collected in the first half of the year. So, homeowners will have to make up the shortfall in the third and fourth quarters.
This rate is also not final, as neither the city nor county have adopted a budget for this year. In a worst case scenario, the final rate could go even higher.
What is a Jersey City property taxpayer to do? While the filing deadline is passed for a 2022 property tax appeal, It’s never too early to start thinking about an appeal for 2023. Also, for commercial property owners, make sure to respond to any Chapter 91 requests sent out this year! (See more about these in my blog on the subject HERE.
If you have any questions or thinks an property tax appeal may benefit you, please give us a call.