Ready to File a Tax Appeal
Updated: Mar 3, 2018
As I outlined in the prior post, not all properties qualify for a tax appeal. If you have come to the conclusion that your property is over assessed, what should you do next. I will outline the Do’s and Don’ts in filing an appeal.
· In most cases, the filing deadline is April 1st. The appeal has to be filed with the county and local tax assessor. The filing fees are $5.00 for homes assessed under $500,000 and $25.00 for homes assessed from $500,00 to $1,000,000. Check with your County Tax Board for more information. In Middlesex County, the information is available at: http://www.middlesexcountynj.gov/Government/Departments/Finance/Pages/Tax-Appeals2.aspx
· The date of value is October 1st of the preceding year. If you are filing for 2018, what was the value of your home as of October 1, 2017?
· Comparable sales need to be before October 1 and should be no more than one year old. However, there is some leeway, especially if you have a sale of a similar home on your block that is just over 1 year old, or was under contract as of October 1, 2017.
· All comparable sales and/or appraisals must be into the County and Assessor at least 7 days prior to the hearing. Don’t go into the hearing with your sales and expect the commissioners to except them. The assessor needs time to go through your sales and verify the information.
· Verify the sale you use are “Usable Sales” and similar to your property. What do I mean by usable sales? Sales have to be “Arm’s Length” transactions. Willing seller and willing buyer. Estate sales, short sales, bank sales are not usable. When you research your sales, look to see if there is a number under the NU description. If there is a number, it may be a non-usable sale.
· Be prepared to compare your property to the comparables. What makes your house similar or different? How big were the houses? Were they updated? It is up to you to make a case for lowering your assessments.
· Don’t compare your taxes with your neighbors taxes – you are appealing your assessed value. As previously said, you are not appealing your taxes, you are appealing the value. Comparing your house with your neighbors is only good if your neighbor’s home sold within the past year.
· Don’t go in with an appraisal without the person who prepared the appraisal. Many times a home owner will go to the hearing with an appraisal that was done for their mortgage and the bank gave them a copy. This appraisal cannot be put in as evidence unless the person who prepared the report is there to testify to it. The assessor has the right to cross examine the appraiser and they cannot do it if they are not present
· Be careful when using a services that charges $99 for sales to use in your appeal. I have been to hearings where the commissioner will tell the audience upfront that they will not rely on these reports. The reports typically include everything that sold in your neighborhood. Condo, 2 families, useable and non-usable sales. If you have a ranch style home, you need ranch style comparable sales. These services may be a good start, but you can get good information from public records and the internet.
· Don’t go into a hearing without comparable sales to support your case. Sounds like common sense, however, too often when homeowners goes into a hearing and just talks about sales in the neighborhood with no supporting documents. It is up to you to prove that you are over assessed. The assessor is not going agree unless you give them a reason.
Is it worth It.
Filing a tax appeal using the services of an attorney and/or an appraiser can add up. Attorney fees are typically 1/3 the tax savings. Appraisal fees vary but average around $450 for a typical home which may not include their time if they have to attend the hearing. If your savings is only $500, you end up losing money.
You can file and represent yourself and many people are successful in doing this if you follow the recommendations outlined above. There are advantages to using professionals, but that is a decision you will have to make. It is best to speak with someone first who is familiar with the process.
At New Jersey Realty Advisory Group, LLC, we work with home owners, attorneys and municipalities and have the experience you need. Give us a call if you have any questions.