As real estate values have declined, a large number of New Jersey homeowners and business owners are trying to lower their property taxes. State offices are flooded with appeals.
This is a catch-22 for many municipalities who we know rely on this tax revenue to provide public services. It seems these tax appeals will only increase in the near future. It is no surprise that homeowners do not want to pay a tax that has no relation to property value. Makes sense to me. After all, who wants to pay a price for anything that’s not based on true value?
So far this year, the Tax Court of New Jersey, which handles appeals for properties valued at more than $750,000, has already processed over 10,000 complaints. This is an increase of about 4,000 relative to the same period last year. County boards of taxation, which handle the appeals of lesser valued properties, are also reporting significant increases, all of which threaten to cut into the budgets of municipalities.
So, what happens when the homeowner wins the appeal? When there is a successful appeal [the cost] is NOT split up between the county and the school; the municipality has to absorb the total loss. Municipalities must refund all portions of the tax, including the school portion, which makes up about 70 percent.
Are you a homeowner who feels your property taxes are totally out of line with your lower property value? Well, you have the right to appeal. But beware. Homeowners have been known to go to court only to have the taxes increased. Do your homework first.
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