The assessment of real estate for taxation is the main way NJ allocates the cost of local government among those who share in its benefits.
The intent and goal of tax laws is (or at least should be) the equal distribution of that cost. However, no government system is, or can be, perfect. Some level of inequity is virtually inevitable.
If that is the case, which risk is preferable – the risk of compelling one individual to pay more than their fair share of taxes, or the risk that many people are paying a little more because an individual is paying something less than their fair share? Or put differently, do you favor the right of the individual to not pay more than their fair share, or the right of many?
For many fundamental freedoms, the right of the individual that is given priority. We tolerate speech we don’t agree with because we believe in the free exchange of ideas. We accept different religious opinions and expressions to protect the right of the individual to different beliefs. We have an elaborate system of justice designed to protect the rights of the accused and guard against punishing an innocent person. In so many aspects of life, the individual’s rights are protected, despite the cost to society.
So, to go back to my question, do we prioritize individual rights in NJ property taxation? The answer, in my opinion, is a resounding no. Many things we’ve discussed – spot assessments, reverse tax appeals, added assessments – are all aimed at ensuring properties pay their fair share at an individual level.
New Jersey, as well as other jurisdictions, does allow taxpayers to challenge their assessments, but even then, the deck is stacked heavily against the taxpayer. High burdens of proof, strict filing deadlines, procedural and tax payment requirements and relaxed refunding rules all limit the effectiveness of the process to protect the right to equal tax treatment.
Methodologies to attack the problem of underassessment at the district-wide or even neighborhood-wide level are underused because of cost, political unpopularity and small assessing departments. Where they are used, it is done in a somewhat arbitrary fashion and with an eye towards defeating the individual right to challenge a tax assessment.
What do you think – do we have it right? Is it better to allow an individual taxpayer to face over assessment rather than let them escape taxation, or would it be better to prioritize ensuring that no one pays more?
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.
A classic spot assessment is the reassessment of a single recently-sold property that isn’t part of a larger scale reassessment or municipal-wide revaluation.
It is Illegal!
Spot assessments are illegal in New Jersey because the state constitution requires uniform treatment in taxation. In general, reassessments must be performed on all properties as part of a larger reassessment cycle, or else because a single property has been significantly improved upon, to comply with this constitutional requirement. However, when the assessor increases the assessments of only a handful of recently sold properties, he or she has violated this constitutional requirement, and you can seek relief from the increase.
There are unscrupulous assessors who try to take advantage of people’s unfamiliarity with the nuances of the law – it can happen. This is a particular problem in a market where values are rising, as assessors may be tempted to target the low-lying fruit of recently sold property instead of implementing a town-wide reassessment or revaluation.
Assessors may also try to justify the assessment increases because of property improvements. However, minor cosmetic updates such as tidying the landscaping, painting the exterior, fixing a broken shutter, re-hanging a fallen gutter, etc., shouldn’t trigger an increase as no significant improvements were made that would increase property value. However, it still happens!
If you believe your property has been unfairly singled out for an assessment increase, it’s important to contact an attorney immediately who can evaluate your case and secure your right to appeal as it may be impossible to overturn an improper increase otherwise.
And if you were part of a town-wide revaluation, but are concerned or dissatisfied with the new figure, you may still be able to appeal. I provided an overview of the appeal process in this previous blog post. Also, the state of New Jersey has published this pamphlet with some property tax FAQs for property owners, which may be helpful as you review your recent revaluations.
For almost 15 years, I’ve obtained hundreds of millions of dollars in assessment reductions for my clients. I offer a complimentary assessment review to determine your eligibility to appeal. If you decide to go through with filing an appeal, you will receive my personal attention from start to finish as I strive to obtain the best result possible. Contact me with any questions or to schedule a consultation.
By now, most every New Jersey real estate owner should have received their property tax assessment postcard. For some reason, if you have not received the postcard, or lost it, call your municipality for a replacement. The postcard tells you the assessed value of your property which is used to determine your property tax bill. This assessment can be wrong. And in New Jersey, every property owner (and some tenants) has the right to appeal their tax assessment. If your assessment is $1,000,000 or less in Monmouth County, it’s already too late - the January 15, 2022, filing deadline has already passed. But the deadline to file an appeal in most locations is April 1st. If you feel your property has been over-assessed, don’t miss the 2022 filing deadline for a New Jersey Tax Appeal.
Revaluations & Reassessments
More frequently, municipalities in New Jersey are performing reassessments and revaluations to keep their tax rolls up to date. This can result in a significant increase in your property assessment. For municipalities that have performed a reassessment or revaluation, the deadline to appeal is May 2, 2022.
2022 Reassessment & Revaluations
If you own real estate in any of the following municipalities, it is a good idea to see if your revaluation or reassessment is fair. Again, the deadline for an appeal for these places is May 2.
Nothing to Lose
For almost 15 years, I've worked to reduce my client’s tax assessments. I’ve obtained hundreds of millions of dollars in assessment reductions for my clients. If an appeal is right for you, you will receive my personal attention from start to finish, and I will strive to obtain the best result possible. So, call me with any questions or to receive a complimentary assessment review to determine if you can benefit from a tax appeal. And regardless if you contact me or not, don’t miss the New Jersey tax appeal deadline.
It’s that time of year again. If you haven't already, you will be receiving your New Jersey Property Tax Assessment postcard from your local tax assessor. Keep an eye open for it – it looks something like this:
If you do not receive a postcard or misplace it, you can contact your municipality for a replacement.
What Does the Postcard Say?
The postcard tells you the assessed value of your property. Your municipality calculates how much you owe in property taxes using your assessment and the local property tax rate. The assessment is just the local tax assessor’s opinion of your property’s value. Because many factors affect a property's value, assessments can often be wrong. When the assessment is incorrect, all property owners (and some tenants) have the right to file an appeal. Your assessment can also be misleading because it may only represent a fraction of the estimated market value.
What if I think my assessment is wrong?
Again, you have the right to appeal your assessment. In fact, you may appeal your property's assessment every year. Therefore, depending on the property's assessed value, you may file an appeal at the County Tax Board or in New Jersey Tax Court. The taxpayer must supply the County Tax Board with sufficient evidence to determine the property's true market value.
Once the Tax Court or County Tax Board determines the property's true value, it must compare the property's true value to the assessed value. Depending on the municipality, it could be a direct comparison, or it could involve using the town’s average ratio of assessed value to true value, which is determined by the New Jersey Division of Taxation for every town, every year.
And don't forget the deadline to file a property tax appeal in most of New Jersey is April 1, 2022.
Here to Help
For almost 15 years, I've worked to reduce my client’s tax assessments. I’ve obtained hundreds of millions of dollars in assessment reductions for my clients. If an appeal is right for you, you will receive my personal attention from start to finish, and I will strive to obtain the best result possible. So, call me with any questions or to receive a complimentary assessment review to determine if you can benefit from a tax appeal.
As a New Jersey property tax appeal attorney, I spend significant time explaining the tax appeal process to clients. This blog is intended to answer some of the most common questions about appeals to the county Boards of Taxation, a.k.a. county tax boards. Appeals to New Jersey’s state Tax Court are different in some ways. Thus, we will address them in another blog post.
When do I have to file my property tax appeal?
For most of New Jersey, tax appeals must be filed on or before April 1 of the year on appeal, or within 45 days of the bulk mailing of assessment notices. However, the deadline is May 1 when there is municipal-wide revaluation or reassessment.
For counties participating in the “Assessment Demonstration Program,” the filing deadline for properties with an assessed value of $1,000,000 or below is January 15 of the tax year in question. If the assessment is greater than $1,000,000, the appeal can be filed until April 1, but must be filed at the New Jersey Tax Court.
What happens after the filing of an appeal?
The Tax Board will schedule a hearing, generally within a few weeks of filing. Prior to the hearing, the municipal tax assessor will often schedule an inspection of the property. You are also preparing to present your case to the Tax Board, and sometimes negotiating with the tax assessor or attorney to resolve the appeal.
Who decides a tax appeal?
If your assessment is $1,000,000 or less, your county’s Tax Board will hear your appeal first. The Tax Board consists of commissioners appointed by the Governor with the advice and consent of the state Senate. Tax Board Commissioners primarily hear disputes involving the property’s assessed value.
Do I need an attorney?
Business entities, other than sole proprietorships, require representation by an attorney. The taxing district is the opposing party and is represented by an attorney. Individual owners may represent themselves but should hire an attorney to guide them through the process.
Who qualifies as an expert witness?
An expert witness is someone qualified by knowledge, skill, experience, training, or education to give an opinion on an important issue in a dispute. The opinion must involve scientific, technical or other specialized knowledge. In a tax appeal, the most common expert witness is an appraiser. The municipal assessor may also testify at the hearing as an expert witness.
How do I get an expert for my appeal?
If you want to have an expert testify at your hearing, you must hire an appraiser to prepare a report on your property’s market value. You must supply copies of the appraisal report to the tax assessor and Tax Board Member at least 7 days before the scheduled hearing. The appraiser who completes the report must be available to testify at the hearing. The municipal attorney can cross-examine the appraiser. An expert's qualifications may also be challenged at the hearing.
Do I have to have a hearing?
No. If the tax assessor, municipal attorney, and taxpayer agree to a settlement, a hearing may not be necessary. In addition, some counties now conduct hearings via teleconference, Zoom or similar means. The Tax Board must approve all settlement stipulations. Keep in mind that all meetings at the county Board of Taxation are public meetings.
When are property tax appeal hearings?
Tax Board hearings usually take place within three months of the filing deadline – whether January 15, April 1 or May 1 - unless the county receives an extension from the Division of Taxation.
What happens if I don’t go to my hearing?
If you do not show up for the hearing, you should expect a dismissal of your case for lack of prosecution. These judgements are final for the current year and generally cannot be appealed to the New Jersey Tax Court. Adjournments are usually denied, so you should make every effort to prepare for and attend your hearing.
Again, these are just some of the common questions about New Jersey property tax appeal process. Future blogs will discuss other parts of the appeal process. Please call me if you have other questions or want to see if you could benefit from an appeal of your property’s tax assessment.
To function, local governments collect property taxes from commercial property owners and homeowners within their borders. The amount of taxes a property owner pays depends on the assessed value of the property and the local tax rate. A tax assessment is an opinion of value from the local tax assessor. Because there are many factors that affect a property’s value, assessments can often be wrong. Consequently, the resulting assessment can be excessive or discriminatory.
Your assessment may be excessive or discriminatory if it meets one of these two standards:
Sale Price v. Assessed Value
The NJ State Division of Taxation, with assistance from local assessors, annually conducts a survey of real estate sales in every town in the state. The primary purpose of the study is to help allocate school aid funds among New Jersey municipalities. However, it plays an important role in determining whether your assessment is fair. In the annual survey, every sale price in town is compared with the property’s assessment value. These comparisons yield a ratio of sale price to assessed value.
The average of the sale price to assessed value ratios is known as the average ratio, or Director’s average ratio, or simply the Director’s ratio. The Director’s ratio represents the “common level” of assessment in your community. In any year except the year of a district-wide revaluation or reassessment, the common level of assessment is used by the Tax Court or County Tax Board to help determine the fairness of your assessment.
What if I don't think my assessment is fair?
You may appeal your property’s assessment every year. Therefore, depending on the assessed value of the property, you may file at the County Tax Board or state Tax Court. Once the Tax Court or County Tax Board determines the true value of the property on appeal, it must compare the property’s true value to the assessed value.
If the ratio of assessed value to true value exceeds the Director’s average ratio by 15%, there is a reduction of the assessment.
On the other hand, if the assessed value to true value ratio falls below the common level, the Tax Board must increase the assessment to the common level.
The taxpayer must supply the County Tax Board with sufficient evidence to determine the true market value of the property. Appellants should know their district's average ratio before filing a tax appeal. This ratio changes each year for use in the next tax year.
Have Questions or Need Help?
As a property tax appeal lawyer, I know the complexities of these concepts. Hence, it is common for business owners and homeowner to have questions. Please call me if you need more information or clarification. Also, if you think that your property taxes are too high, contact me for a free assessment review. I can tell you if your property’s assessment is excessive or discriminatory.
Four New Jersey municipalities, a deputy tax assessor and a handful of individual taxpayers have filed a lawsuit seeking to overturn a recently-enacted law. The law grants hospitals a tax exemption in exchange for a direct per-bed payment to the municipality. This exemption is in lieu of traditional property taxes.
The case was filed in Mercer County Superior Court. However, Mala Sundar, Presiding Judge of the Tax Court, was temporarily transferred to the Superior Court. Understandably, the court desires expertise in taxation in this case. Thus, it triggered the Tax Court's limited jurisdiction. The parties have filed cross-motions for summary judgment, with a hearing scheduled for mid-November.
The plaintiffs' primary argument is that the New Jersey Constitution requires any exemptions to be granted by general laws. Essentially, this law singles out hospitals for preferential tax treatment. A Tax Court decision in 2015 is the rationale behind this new law. In this decision, the Court found that Morristown Medical Center was not entitled to a property tax exemption because the hospital conducted for-profit activities. As a result, this watershed case led to a flurry of litigation in the Tax Court. Accordingly, municipalities sought to recapture revenue from previously exempt hospitals. The new law brought an end to the appeals by providing hospitals with an exemption through "community service" to the municipality. A portion of the fees go to the county. However, the school district receives no fees, which typically commands the largest portion of the property tax levy.
Why does this case matter?
Quite simply, the revenue to municipalities under traditional tax structure would far exceed the "community service" payments under the law.
As New Jersey taxpayers are all too aware, one less dollar that someone else pays in property tax means that the rest of the property owners in town will be picking up the tab. The esoteric question animating the legal discussion is thus - should property owners bear a portion of the cost of a local hospital? Or, should the users, insurers, employees and others associated with the hospital bear the cost in the potential form of increased care costs, decreased salaries, or increased insurance premiums?
To be sure, there is certainly some benefit having a local emergency room available to a township, which is part of the "quid pro quo" analysis for granting an exemption in the first place. However, is the windfall to hospital stakeholders justified by the mere presence of a hospital in town? Hopefully, this litigation will answer some of these questions. Regardless, the stakes in this challenge are unquestionably high.
We will keep an eye on this case and report any developments. In the meantime, please call with any questions.