Bergen County New Jersey Tax Appeals – Understanding the Effect of Real Estate Revaluations

dollar-sign-1317230-m-150x150In 2018, many towns in Bergen County, New Jersey will undergo re-assessments. The municipalities affected include Carlstadt, Closter, Cresskill, East Rutherford, Hackensack, Hasbrouck Heights, Little Ferry, Moonachie, North Arlington, Oradell, Saddle Brook, South Hackensack, Teterboro, Westwood, and Woodcliff Lake. Additionally, the town of Saddle River will be conducting a revaluation. Revaluations and re-assessments differ only in that revaluations require the services of an outside company, whereas re-assessments are conducted by the assessor’s office. In both cases, however, the new assessments cause a great deal of confusion for some taxpayers, who mistakenly believe that the sudden increases in their assessments will result in a large increase in their tax bills. However, this notion is usually not correct.

Towns that have not been revalued or re-assessed in several years generally have assessments that are based on a small portion of their true market values. As a result of the under-assessments, the municipality annually increases its tax rates in order to satisfy the demands of the municipal budget. Due to the time and expense of conducting a revaluation, a town will generally wait several years before doing so. Then, when a revaluation or re-assessment occurs, one of the goals is to raise assessments up to close to 100% of the true market values of the properties. Consequently, the tax rates will drop commensurately so that, aside from some modest budget increases, the total tax revenue for the town is about the same as it was prior to the revaluation. Therefore, the average taxpayer will not experience any positive or negative effect from the revaluation.

Notwithstanding the arithmetic of the process, there are some taxpayers whose tax burden may change dramatically due to market trends in specific neighborhoods of a town that may result in the assessments of some properties increasing more than others. Therefore, while the net effect of a revaluation or re-assessment is ostensibly “tax neutral,” there will usually be a few taxpayers who will benefit from the revaluation or re-assessment while others are negatively impacted.

A negative impact of a revaluation is not enough, in itself, to win a tax appeal. In order to win a tax appeal, the taxpayer must still show that the new assessment exceeds the fair market value of the property. Taxable value is determined as of October 1 of the pre-tax year (i.e.; 2017, in this instance). Appraisals bearing a valuation date of October 1 for tax appeal purposes, or comparable properties that sold within a year before (or possibly a month or two after October 1) will be acceptable forms of evidence. In the event that your property has been over-assessed, please contact our office for a free initial consultation.