Did you miss the residential tax appeal workshop? Here are slides prepared and presented by Jeff Gradone, Esq. The presentation walks you through the process of the residential tax appeal in New Jersey.

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

2. 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.

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

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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

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

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

12. 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

13. Should I File?
• Example
− Assessment = $2,000,000
− Appraiser’s fmv estimate = $10,000,000
− Good Case?
• City of Elizabeth’s ratio – 12.10%
$2,000,000 AV ÷ .1210 = $16,528,926 AFMV

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

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

16. Should I File?
Other Considerations
• Cost/Benefit Analysis
− Example
• Madison – 1.908% tax rate
• 1.908% tax rate - $1,908 savings for $100,000 reduction

17. 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

18. 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

19. Other Concerns
• Spot Assessment
– Reassessment upon sale
– Assessment maintenance
• “Reverse” Appeals
– Seek to increase assessments!
– Increasingly more common!