STANDARDS FOR VALUING REAL ESTATE
New Jersey's real property tax is "ad valorem" (Latin that means according to value). This is a tax based on the value of real estate. Simple put a "tax according to the value" that each person pays tax, based on the value of property he or she owns. In order to be successful in winning a tax appeal the petitioner must prove the market value of their property is a minimum of 15% below the current 100% assessed value. How do you determine what the 100% assessed value is? First you must find out the equalization ratio of your town or municipality by calling your towns tax assessors office. Some towns may already be assessed at 100% of value but many are not. Let's say we live in Wayne, NJ and the current assessed value of the land is $120,000 and the assessed value of the improvement is $157,000 the total of the land and improved value = the total assessed value, in this case would be $277,000. Now let's say Wayne Townships equalization ratio was 51.28%. What this means is that the total assessed value of $277,000 only represents 51.28% of its market value. To determine how to get the 100% assessed value of $277,000 use this formula:
Total Assessed Value / Equalization Ratio = 100 Assessed Value
$277,000 / .5128 = $540,017.16
Now we know that the market value placed on your home by the tax
assessor is $540,017.16
In order to have a successful tax appeal and reduce your property taxes you must now prove to the tax board & tax assessor that the market value of your home is at least a minimum of 15% below the 100% assessed value which in this case is $540,017.16. How do we figure this out?
100% Assessed Value X .85 percent = The New Market Value Needed
To Reduce Your Taxes $540,017.16 X .85 = $459,145.86
You now have to find comparable closed sales from October 1, 2011 - October 1, 2012 that are similar to yours in design, appeal, square footage, lot size and style ( ranches to ranches, bi-levels to bi-levels etc.) that will support the true
value of your home to be $459,145.86 or less. If you're able to do this you more
than likely will get your property assessment reduced thus lowering your taxes. To ensure your success you may want to consider hiring a professional appraiser to do an appraisal on your home using comparable sales within the time frame mentioned above. Here are a few links regarding tax appeal information that you may find helpful.
Download Tax Appeal Form A-1 http://www.state.nj.us/treasury/taxation/pdf/other_forms/lpt/petappl.pdf
Tax Appeal Brochure: http://www.state.nj.us/treasury/taxation/pdf/lpt/ptappeal.pdf
Tax Court of New Jersey: http://www.judiciary.state.nj.us/taxcourt/index.htm
New Jersey Tax Board Information: http://www.vitalgov.com/newjersey-tax-board-information.html
Save Big Money on Your Property Taxes Video:http://www.youtube.com/watch?v=Zxw6GB0gv68
Appealing your property taxes can be a confusing, daunting and irritating process without the proper knowledge and help. You may want to hire an attorney or real estate appraiser to help you through this process.
Information in this blog is deemed reliable but not