Tax Talk: Filing an Appeal

April 1st is the deadline for filing property tax appeals with the County Tax Board which is why many residents may be receiving letters from companies offering assistance with the appeal process. New Milford tax assessor Maureen Kaman wants residents to know that companies, such as Value Appeal and Davenport & Spiotti, that offer to assist homeowners with the tax appeal process charge for a service that you can do on your own. 

"Essentially, you are paying them to provide you with documentation that can be freely obtained from the tax assessor's office," Kaman said. 

A taxpayer who believes that their assessment is inaccurate as of October 1st of the pretax year (the assessing date) has the right to file an appeal with the Bergen County Board of Taxation. 

High taxes alone do not guarantee a successful appeal. Tax appeals are judged to have merit based on specific criteria. 

In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove that an assessment does not fairly represent one of the two standards:

• Following a revaluation, all assessments must represent 100 percent of true market value as of the previous October 1. The October 1 pre-tax date is called the annual "assessment date". All evidence submitted in a tax appeal must be on or near the assessment date, especially property sales used as comparables.
• The other standard is the "common level" or common level range established in your municipality. To explain the common level range you must consider what happens following a revaluation or reassessment. Once a revaluation or reassessment is completed, external factors such as inflation, appreciation, and depreciation may cause values to increase or decrease at varying rates.

In 1973 the New Jersey Legislature adopted a formula known as Chapter 123 to test the fairness of an assessment. Once the Tax Board has determined the true market value of a property during an appeal, they are required to automatically compare the true market value to the assessment.

If the ratio of the assessment to the true value exceeds the average ratio by 15 percent, then the assessment is automatically reduced to the common level. However, if the assessment falls within this common level range, no adjustment will be made.

If the assessment to true value ratio falls below the common level, the Tax Board is obligated to increase the assessment to the common level. This ratio changes annually on October 1, for use in the subsequent tax year.

Other factors such as physical deterioration may contribute to changes in property values, or in the case of New Milford, houses that have experienced repetitive flood damage. Additional factors such as a stagnant economy and a decline in the housing market also affect the value of property. Obviously, if assessments are not adjusted annually, a deviation from 100 percent of true market value will occur.

At a , Kaman told the mayor and council that since the 2004 revaluation the housing market has sharply declined, taking property values with it. She explained that based on recent sales, the decline in the housing market has caused a sizeable disparity between the assessed value of property and the true market value and recommended that the borough perform a hybrid reassessment as a means to create stability and reduce the number of appeals. (Kaman said there were 123 appeals last year.) A hybrid reassessment is conducted to equitably spread the tax burden by appraising each property according to its true market value and base assessments on this value.

"Hybrid" refers to an outside revaluation company retained by the borough to provide the additional manpower needed to perform all of the on-site property inspections. Once the information is gathered, both the tax assessor and the contracted revaluation firm will analyze the data and establish the formulas to determine the valuation of a property. The estimated cost for conducting and executing the reassessment is $200,000.

Property owners who wish to file an appeal are urged to speak with the tax assessor to obtain more information on the process. The assessor represents the borough in all tax appeals before the Tax Board.

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