The slide deck from the Weichert, Princeton tax appeal seminar.

1. Presented by:
Jeffrey M. Gradone, Esq.
Understanding the Residential
Tax Appeal Process

2. How Assessments are Set

3. Revaluation Basics
Site Inspection
• Letters sent to property owners advising of
inspection.
• If no one is home, exterior inspections made.
• Follow-up appointments are scheduled.
• If no one is home for the second visit, the
property owner is asked to schedule a time for
inspection, otherwise the interior will be
estimated.

4. Revaluation Basics
Data Collected During Inspection
• Building measurements
• Number of bedrooms, bathrooms, finished
basements, porches, etc.
• Type, quality and age of construction

5. Revaluation Basics
Delineation of Neighborhoods
• The revaluation company, with the
assistance of the municipal tax assessor,
determines neighborhoods for purposes of
valuation.
• Neighborhoods are delineated based on
similarities.

6. Revaluation Basics
Use of Comparable Sales
• Sales are analyzed to determine whether
sale prices are indicative of fair market
value.
• Sale properties are inspected using the
same guidelines as inspections for all
properties in the municipality.

7. Revaluation Basics
Land Value Extraction
• Value of site improvements is determined
through calculation of reproduction costs,
minus depreciation.
• Value of site improvements is subtracted
from sale price to determine land value.

8. Revaluation Basics
Land Value Extraction
• Land value is time-adjusted for applicable
valuation date.
• Land value is also adjusted for site specific
characteristics (location, slope, etc.).
• Land formula is derived for each
neighborhood.

9. Revaluation Basics
Calculation of Assessment
• Land Value
− Land formula is applied to subject property.
− Adjustments are made for size, location and other
site specific attributes.

10. Revaluation Basics
Calculation of Assessment
• Improvement Value
− Reproduction cost is calculated based on building class and
improvement square footage.
− Effective age of the improvement is determined and
corresponding depreciation is applied to reproduction cost.
• Total Value = Land Value + Improvement
Value

11. To Appeal or Not to Appeal

12. Tax Appeal Basics
Market Value
x Ratio
Assessment
x Tax Rate
Property Taxes
 Challenge this
 Don’t directly challenge this
 Cannot challenge this

13. Should I File?
• Assessed value ≠ Market value
• Convert assessment using “average ratio”
Assessment ÷ Ratio = Assessed fmv

14. East Orange, NJ
Assessed Value Ratio Market Value
2013 10,000,000
2014 10,000,000
2015 10,000,000
2016 10,000,000 91.95% 10,875,476
2017 10,000,000 91.56% 10,921,800
100%
86.77%%
89.90%
10,000,000
11,524,720
11,123,470

15. Should I File?
• Example
− Assessment = $2,000,000
− Appraiser’s fmv estimate = $10,000,000
− Good Case?
• City of Elizabeth’s ratio – 13.09%
$2,000,000 AV ÷ .1309 = $15,278,839 AFMV

16. Should I File?
Other Considerations
• Chapter 123
− 15% statutory “leeway” for the assessor
• Increased assessments
− 15% protection for taxpayer

17. Should I File?
Ratio Lower Limit Upper Limit
(For Increase) (For Reduction)
New Brunswick 38.84% 33.01% 44.67%
$500,000 $ 1,287,333 $1,514,693 $1,119,319

18. Should I File?
Other Considerations
• Cost/Benefit Analysis
− Example
• Madison – 1.840% tax rate
• 1.840% tax rate - $1,840 savings for $100,000 reduction

19. The Appeal Process

20. Where & When
•Total assessment $1,000,000 or less  County Board of Taxation
•Total assessment greater than $1,000,000  CBT or Tax Court
Unless
Monmouth
County, then
January 15,
or 45 days
from mailing
of assessment
Regular Annual
Assessment April 1,
or 45 days from mailing
of assessment
Unless a
revaluation or
reassessment
then May 1
Unless an added, omitted or roll-back assessment, then December 1,
WITH EXCEPTIONS!!!
or 30 days from the mailing of assessment

21. Other Concerns
• Standing
− Owner
− Other aggrieved “taxpayers” – tenants
• Payment of taxes
− Appeal dismissed for non-payment
− Two statutes with technical differences
• Direct appeals – “cure” opportunity at Board of Court
• Appeal to Tax Court from Board – no “cure”
• Lack of Prosecution at the County Board
− Cases – mostly for unexcused failure to appear
− Small efforts typically deemed sufficient by Tax Court
• Chapter 91 Requests

22. Other Concerns
• Spot Assessment
– Reassessment upon sale
– Assessment maintenance
• “Reverse” Appeals
– Seek to increase assessments!
– Increasingly more common!
– Taxing districts and occasional 3rd parties