Lower Your Property Taxes: A Step-by-Step Guide to NJ Tax Appeals

Table of Contents

1. Introduction
2. What is a Tax Appeal?
3. The Process of a Tax Appeal
4. How to Determine if You are a Good Candidate for a Tax Appeal
5. The Success Rate of Tax Appeals
6. The Timeline for Filing a Tax Appeal
7. Changes due to COVID-19 and Extended Deadlines
8. How Often Can You File a Tax Appeal?
9. The Downsides of Filing a Tax Appeal
10. What to Expect with Taxes After Closing on a Home

🏠 Introduction

Welcome to Homes by Banda! In this article, we're going to discuss a topic that is of great importance to homeowners in the state of New Jersey: property taxes. Specifically, we'll be diving into the question of whether you may be paying too high of property taxes and whether you should consider a tax appeal. We have a true expert joining us today, Ellie Fink, a lawyer specializing in tax appeals for residential and commercial property owners in New Jersey. Ellie has successfully saved millions of dollars for her clients and has been recognized by the New Jersey Super Lawyer magazine for her excellence in taxation. So, let's get started and uncover if you're truly paying too high of property taxes and how a tax appeal can help.

🏦 What is a Tax Appeal?

A tax appeal, also known as a property tax appeal, is a process in which homeowners have the opportunity to contest the assessment or evaluation of their property's value. The goal of a tax appeal is to potentially lower your property taxes by presenting evidence that supports a lower valuation of your property. It's important to note that everyone in a given town pays the same tax rate based on the assessment of their home. Therefore, a tax appeal is essentially an argument about the value of your property. If your property is overvalued, a successful tax appeal can lead to a reduction in your taxes that aligns with the decrease in valuation. However, if your property is fairly valued, but the town's tax rate is high, it may be challenging to make a successful case.

📝 The Process of a Tax Appeal

The process of a tax appeal is relatively simple and straightforward. Here's an overview of the steps involved:

1. File an Appeal: Typically, appeals need to be filed between February 1st and April 1st. It's important to adhere to these deadlines, although there may be exceptions.
2. Submit Evidence: As part of the appeal, you'll need to provide evidence, such as comparable sales data, which demonstrates that the value of your property is lower than the assessed value determined by the town.
3. Negotiate or Proceed to Hearing: Before the hearing, there may be an opportunity to discuss a potential settlement with the tax assessor. If an agreement cannot be reached, a hearing before the county board will be scheduled.
4. County Board Judgment: Following the hearing, the county board will issue a judgment that determines the outcome of your appeal. If successful, your assessment will be lowered, resulting in a reduction in property taxes.

❓ How to Determine if You are a Good Candidate for a Tax Appeal

Determining whether you're a good candidate for a tax appeal requires considering several factors. While there isn't a one-size-fits-all answer, here are some indications that you may be a good candidate:

1. If you recently purchased the property for less than the assessed value, you likely have a strong case for an appeal.
2. If you have obtained a recent appraisal or have reason to believe that the value of your property is lower than the assessment, it may be worth exploring an appeal.
3. If you believe that your property is overvalued and have evidence to support this claim, pursuing a tax appeal could lead to a reduction in your property taxes.

It's always advisable to consult with a knowledgeable professional, like Ellie Fink, who can analyze your specific situation and provide expert guidance on your potential as a candidate for a tax appeal.

✅ The Success Rate of Tax Appeals

While success rates can vary, it's important to note that many tax appeals result in some reduction in property taxes. Ellie Fink has a proven track record of success in representing property owners and achieving favorable outcomes. However, the extent of the reduction will depend on the individual case and the strength of the evidence presented. It's essential to set realistic expectations and understand that not all appeals guarantee substantial reductions in taxes. Nonetheless, working with an experienced attorney increases your chances of a successful outcome.

⏳ The Timeline for Filing a Tax Appeal

The time to consider filing a tax appeal for property tax purposes starts after October 1st of the prior year. This means that anytime after October 1st, you should start thinking about initiating the process. Although the official filing deadline is typically April 1st, it is advisable to begin the process as early as possible, ideally from mid-October onwards. Starting early allows for proper preparation of evidence and increases the chances of a successful appeal. However, it's essential to consult with a professional like Ellie Fink to ensure you meet all necessary deadlines and requirements.

🦠 Changes due to COVID-19 and Extended Deadlines

In response to the COVID-19 pandemic, New Jersey extended the tax appeal filing deadline from April 1st to July 1st for the previous year. While it's uncertain if similar extensions will occur in the future, it's important to be prepared and assume that the filing deadline will be April 1st. Keep in mind that tax appeal deadlines are typically strict and missing the deadline could result in the forfeiture of your appeal. Therefore, it is crucial to consult with an attorney and submit your appeal well before the designated deadline.

🔁 How Often Can You File a Tax Appeal?

You are allowed to file a tax appeal every year. However, it's important to note that pursuing an appeal repeatedly is akin to taking a second bite at the same apple. If you were successful in a previous appeal, it becomes less likely to achieve a reduced assessment in subsequent years. Conversely, if you were unsuccessful in the past, there might be opportunities for improvement, especially with professional representation. It's important to evaluate your specific circumstances and assess whether pursuing an appeal annually aligns with your goals. Additionally, successful appeals come with a three-year freeze period, during which the town cannot raise your assessment. However, this freeze act does not apply to the property owner.

⚠️ The Downsides of Filing a Tax Appeal

While filing a tax appeal has numerous potential benefits, it's crucial to consider the downsides as well. Two primary factors to keep in mind include the filing fee and the possibility of the town arguing that your property is under-assessed. There is typically a filing fee associated with tax appeals, which should be taken into account before proceeding. Additionally, although it is highly unlikely, there is a chance that the town could argue your property is under-assessed and try to raise your assessment. However, this occurrence is rare and rarely happens with residential properties. It's important to discuss all the potential risks and benefits with an experienced attorney to make an informed decision.

🔬 What to Expect with Taxes After Closing on a Home

Many prospective homeowners often wonder what to expect with their property taxes after closing on a home. The following points will provide clarity on this matter:

1. Constitutional Limitation: If you end up paying more than the assessed value of the property, the town is not allowed to raise the assessment simply based on the purchase price. The purchase price alone should not be the determining factor for an increase in your taxes.
2. Revaluation: If the town is undergoing a revaluation process, there is a higher probability that your property's assessment will align more closely with its market value. This could potentially impact your property taxes after closing.
3. New Constructions or Improvements: Purchasing a newly constructed property or a home that has undergone significant improvements can have an impact on your property taxes. These situations require thorough consideration, as taxes may increase once these renovations are factored into the assessment.

It's essential to communicate with assessors and attorneys to fully understand the projected tax implications specific to your situation. This will help you anticipate and plan for any potential changes in your property taxes after closing.

🌟 Highlights

• A tax appeal is an opportunity for homeowners to contest the assessment of their property's value and potentially lower their property taxes.
• The process involves filing an appeal, submitting evidence, negotiating or proceeding to a hearing, and receiving a county board judgment.
• Determining if you're a good candidate for a tax appeal depends on factors such as recent purchases, appraisals, and evidence of overvaluation.
• While success rates vary, working with an experienced attorney like Ellie Fink increases the chances of a successful appeal.
• It's important to be aware of the timeline for filing a tax appeal and to seek professional advice.
• COVID-19 has resulted in extended tax appeal deadlines in the past, but it's best to assume that the deadline will be April 1st.
• You can file a tax appeal every year, but the likelihood of success may decrease if you were successful in previous appeals.
• Filing a tax appeal incurs a filing fee, and there is a possibility that the town may argue your property is under-assessed.
• Property taxes after closing can be influenced by the constitutional limitation, revaluations, and new constructions or improvements.
• Consultation with assessors and attorneys is crucial for a comprehensive understanding of the tax implications after closing.

Frequently Asked Questions

Q: When should I start considering a tax appeal? A: You should start considering a tax appeal anytime after October 1st of the prior year. However, it's advisable to consult with a professional and begin the process from mid-October onwards.

Q: Can I file a tax appeal every year? A: Yes, you are allowed to file a tax appeal every year. However, the likelihood of success may be influenced by prior outcomes and other variables specific to your case.

Q: Are there any downsides to filing a tax appeal? A: There are minimal downsides to filing a tax appeal, such as the filing fee and the possibility of the town arguing your property is under-assessed. However, the benefits usually outweigh these considerations.

Q: What factors should I consider when determining if I'm a good candidate for a tax appeal? A: Factors to consider include recent purchases, appraisals, and evidence of overvaluation. Consulting with an experienced attorney is crucial for a thorough evaluation of your candidacy.

Q: How can COVID-19 impact tax appeal deadlines? A: In the past, tax appeal deadlines were extended due to COVID-19. However, it's best to assume that the deadline will be April 1st and consult with a professional for the most accurate information.

Q: What can I expect with my property taxes after closing on a home? A: Property taxes after closing can be influenced by various factors, such as constitutional limitations, revaluations, and new constructions or improvements. Consulting with assessors and attorneys will help you better understand the specific implications for your situation.

Resources

• Law Offices of Ellie Fink