Depending on the type of property that you own, property taxes can be quite burdensome. In fact, some people, especially those who own commercial property, can see tens of thousands of dollars in taxes being levied against them on an annual basis. This can threaten your financial stability.
The sad truth, too, is that many people just accept their tax assessment and pay their tax bill without asking any questions. If you choose to do this, then you could be missing out on significant savings. This is because tax assessments are oftentimes inaccurate.
How is a property’s value assessed for tax purposes?
In New Jersey, property taxes are based on a property’s fair market value. This means that your tax assessor should be considering what a knowledgeable buyer is willing to pay given the status of the market on the October preceding your assessment. That may sound simple enough, but the reality is that there is a lot of subjectivity when it comes to tax assessment. So, once you receive your assessment, you may want to consider whether and how each of the following factors were taken into account:
- Improvements made to the property
- Depreciation
- The state of the market
- How comparable properties in the area were assessed
- The condition of your property
- The age of any structures on your property
- Environmental concerns
- Government regulations affecting the property
- Any exemptions that may apply to your property
This analysis requires that you take a holistic approach. Therefore, you shouldn’t be afraid to ask your tax assessor pointed questions about how he or she made his or her determination. Make sure that you take detailed notes that you can refer to later, especially if you’re planning on appealing your tax assessment.
How to build your case for appeal
If you think that your tax assessment is off, then you may want to consider a formal appeal. To do so, you’ll need to make sure that you file the appropriate paperwork with the proper county tax board. Then, you should gather the evidence that you need to present your case. Remember that in order to successfully appeal your assessment, you’ll have to show either that the assessed value is unreasonable in light of the applicable market conditions, or that the assessed value was discriminatory or excessive because it failed to reflect the property’s true market value.
To demonstrate that the assessed value is inaccurate, you’re going to want to gather several key pieces of evidence. For example, comparable properties in your area may reflect that you’re being valued at a higher rate without proper justification. These comparable properties should have roughly the same square footage, similar zoning restrictions, and similar age and style, if possible. You may also want to consider obtaining your own expert real estate appraiser, especially if your tax appeal could lead to you saving tens of thousands of dollars each year.
Know how to competently navigate your property tax issues
It may not seem like it at first, but there’s actually a lot on the line with your property taxes, especially when you extrapolate the costs of those taxes over a significant period of time. That’s why it’s in your best interests to understand how the tax appraisal process works and what you can do to protect your interests through an appeal.
It can be a confusing process, we know, but it’s not one that you have to navigate on your own. Instead, you can choose to work closely with an experienced real estate attorney who can help position you for the successful outcome that you deserve.
