You might be paying more property taxes, unknowingly. National Taxpayers Union indicates, that in the U.S. alone, 60% or more of all properties are overassessed.

And yet, a study of median home prices shows a sharp decline since 2003. This decline should be reflected in assessments, but is not. One reason is that properties are often only assessed once every two or three years.

Based on information provided by NTU — which surveyed assessors — this cycle may be considerably longer. This means, even while house price values are dropping, there is no corresponding decline seen in assessment values — and why many homeowners in New Jersey have ended up paying higher property taxes. In addition, budget shortfalls implemented at local levels amounted to $94 billion for the current fiscal year, leading to municipalities unfairly distributing this burden among taxpayers.

A recent election campaign to voters regarding approved budget shortfalls prove that there has been an increase in property tax rates, especially in states like California, Ohio, Michigan and New Jersey — according to one NTU spokesperson. But while a poll conducted among Kiplinger readers suggests that about 52% feel their property tax has increased since last year, a mere 16% had plans to appeal it.

New Jersey homeowners are beginning to challenge tax assessments of their properties in greater numbers each year, with a sizable portion of these appeals being won. Before considering an appeal, however, you need to prepare yourself by doing the proper research.

Assess your assessment: An appeal process should always start by researching the ways local government assess a property. Things to look out for include the time duration between assessments, the process of determining market value of a house and related details. It is a good idea to employ an appraiser to compare similar properties that sold recently to determine the market value and then multiply this value by set fraction (known as a ratio) to arrive at a assessment value. For example, if the market value of a property is determined to $100,000 and the assessment ratio assumed to be 80%, the assessed value of this property will be $80,000. A different method in practice in rural areas, regions with wealthy neighborhoods, or houses with unique features is to estimate the cost incurred in replacing the house with factors like land value.

One should then proceed with a thorough check for errors in assessment. Consult with the local assessor and obtain a copy of the record card of your property which is kept on file. This record card is a worksheet consisting of information required to assess a property, like number of rooms and dimensions. One should check for square footage being listed correctly, as the footage for house constructed and land used should be checked for errors. If there is an error, say, for example, the card information says your home is equipped with three bathrooms, while you have two — you will have to show blue prints to the assessor to get this reduction accepted and you may not then need to institute a formal appeal for a reduction.

Then proceed to investigate similar properties in your area, to check how your house compares. Examine the square footage, age and number of bathrooms for comparable homes. If the assessed values of five (if you are able to document more, it will be better) similar homes is less than your home’s assessed value, your an appeal for a reduction may be solid. More important is to find properties that are very close, with similarity in square footage, neighborhood and used construction material. To search for records, the assessor’s website is a good place to start.

If you are able to find three properties in neighborhood that are assessed higher than your house’s value, and three more that are assessed at a lower value, do not get dejected. There is still a chance of getting a reduction, by examining unique differences in homes that are comparable in price. Factors such as a property having a less-than-desirable view of a water tower in your city, or having bad grading that does not allow you to grow your garden, etc. can be used to bolster your argument.

Fight back: Every locality has its own set of rules, and an assessment letter should focus on explaining how this appeal is suitable. You will be sending evidence including lists of other comparable properties, blueprints, estimates for repair and photographic evidence to the assessor. You may also try to negotiate with the assessor to settle the matter informally, before all the rolls are completed and perhaps obtain a reduction immediately. In case there is no settlement, be sure to pay tax bills on time and avoid penalties and liens that may be levied against your home. You may get a refund, if the county approves your appeal at a later stage and this can be identified in the form of reduction in future bills.

Make sure you read the fine print thoroughly to be able to comply with all rules and requirements. Have all these documents and information presented as copies to you. A response may be communicated within two or more months. If you are unable to get a reduction, or if you feel the reduction offered is not sufficient enough, bring the case before an independent local appeals board. These boards let you present the case in person, which can be used to your advantage. Using visual aids like photographs during your presentation can help your case.

Cases that fail at local levels can be taken to a State board, which operate similar to local bodies but may only handle certain kinds of cases. If you want to go beyond this, a judicial hearing is the only other alternative. As a homeowner, however, you can expect to pay court and lawyer fees, which may not make this a feasible option.

It may pay to search for expert assistance in petitioning for an appeal. You may also try using online service companies who can gather comparable sales information and assessment data for you for a moderate fee.

You may also try getting professional advice from a real estate appraiser, who will take a thorough look at your property and prepare a detailed report. Ensure though your community allows outside appraisals before filing an appeal. When choosing this route, make sure to hire a person who is certified by the Appraisal Institute or the National Association of Independent Fee Appraisers. Many other factors determine the cost of an appraisal (such as the size of the property), which ranges anywhere from $250 – $600. Hire an appraiser person who has years of experience in your own community and is able to recognize important differences in neighborhoods.

Though more costly, hiring a tax attorney can also be beneficial, but can often assist homeowners in obtaining significantly higher reductions.

Peter Jordan is a New Jersey realtor who assists homeowners in appealing their property taxes. For more information, visit NJ Property Tax Appeal

Peter Jordan is a New Jersey realtor who assists homeowners in appealing their property taxes. For more information, visit http://njpropertytaxappeal.net

Author Bio: Peter Jordan is a New Jersey realtor who assists homeowners in appealing their property taxes. For more information, visit NJ Property Tax Appeal

Category: Real Estate
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