Is Your Property Being Properly Assessed

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By Marc S. Galella, Esq., of R.C. Shea and Associates

In a prior article, we talked about how the basis of a residential real estate tax appeal is whether the property is being assessed by the municipal tax assessor greater than the property’s true market value.  One of the issues in making this determination is how the tax assessment established by tax assessor equates to the true value of the property.

In all municipalities in New Jersey, there is what is called the “equalization ratio”. This is the number, expressed as a percentage, developed by the local County Tax Board to equalize the difference in tax assessments between the various towns in the county. The purpose of the equalization ratio is to ensure that each town pays it fair share of the county taxes. This imbalance occurs because towns reassess or revaluate their tax assessments at different times. Thus, a town that reassesses its real property assessments in the current year will have different real estate values than a town that reassessed four years ago.  In a rising market, properties in the town that just reassessed would have higher values than those in a town that had not re-assessed. The equalization ratio for each town can be obtained from the Tax Board in each county or the municipal tax assessor.  In Ocean County it is available on the website for the Ocean County Board of Taxation.

Accordingly, you must look at the equalization ratio for your town and use that with the tax assessment to determine what the town is showing as the market value for the property. To do this you must divide the assessment by the equalization ratio. For example, a property that is assessed at $200,000.00 in a town where the equalization ratio is 96% would have a market value of $298,333.00. In another town where the equalization ratio is 86%, the town is showing that the market value is $232,558.00.

In other words, to determine what the town is claiming as the property value you need to look at both the assessment and the equalization ratio. This number would then be the value to use in determining whether you should consider filing a tax appeal. For example, if your property is assessed by the town at $350,000 and your property has a market value of $360,000, you may think that you are being under-assessed and thus think it is not worthwhile to file a tax appeal. However, if the equalization ratio for your town is 84%, then your property value, as determined by the town, would be approximately $407,000. This means that the town is assessing your property for $47,000 more than its market value and a tax appeal may be an option.

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. R. C. Shea and Associates has a long history of obtaining reductions in tax assessments for our clients.

For more information on R.C. Shea & Associates, call 732-505-1212 or visit rcshea.com

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For more than 35 years, R.C. Shea & Associates, Counsellors at Law, has been providing legal services to individuals, families and businesses throughout New Jersey. When you come to our firm, your case will be handled with attention and care. At our firm, we have one goal: to exceed your expectations. We are committed to getting you the best results while providing you with the best service. Every day, we work to earn and keep the respect of our clients and the community. Our services include personal injury, workers' compensation, estate planning, real estate, land use and business law. We also handle municipal court violations and expungement.