Assessing the Reassessment in Montclair

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With the town council at a standstill and still no budget for a year that is more than half over, where does reassessment fit in and will it provide any relief to the beleaguered Montclair resident?

According to town manager Marc Dashield the town submitted the reassessment proposal to the county tax board about a month ago and is currently waiting for approval. If and when the board approves the proposal, the assessment would take effect in 2012.

It had been over 20 years since the towns in Essex County conducted revaluations when Montclair issued theirs in 2007. Immediately after the market turned. In just a three year period some homeowners have seen a 15% to 20% drop in value according to one realtor. And with some houses now selling below their reval figures, homeowners are contesting paying taxes based on 2005-2006 figures.

“When we did the revaluation, it was done at the peak of the market,” said Dashield. “We are out of kilter because of that.” Dashield sees a reassessment as bringing valuations “more in line with reality.”

Reality it seems is something the Montclair homeowner is seeking.The number of appeals cases was 830 in 2009, and that rose to 1,225 in 2010. According to tax attorney Michael I. Schneck, who has handled a number of tax appeals in town, cases are taking two to three years to be settled due to the volume and the shortages of judges. “The homeowners we are representing are frustrated by the amount of time it’s taking for the appeal to go through the process,” said Schneck, “and they have to pay taxes at the billed amount until their case is resolved.”

And that amount is significant.

“When the town did the reassessment revaluation, the taxes went up a tremendous amount,” said Robin Seidon, a realtor with Keller Williams Towne Square Realty. “Some went up $2,000 or $3,000.” [some went up more, see below] The increase has a lot of homeowners desperate.

“It’s like a double whammy,” said Allen Ash, a realtor with Coldwell Bankers. Ash repeated what some of his clients are telling him. “Not only is my house going down in value but my taxes are going up, and I’m out of a job.”

With the town’s current budgetary problems, however, Ash acknowledged taxes might still go up, and that’s the crux of the issue. The budget. While the assessment itself “levels the playing field,” according to Seidon, she noted the budget still must be met. “They will just raise the tax rate. It doesn’t help the homeowner.”

Schneck explained it this way: if you lower the assessment of the houses in town, the overall ratable base (taxable amount of money) decreases, and you have to raise the tax rate in order to raise the requisite money to meet budgetary demands. He gave an example. “If overall ratable base goes down by 10% the tax rate will go up by 10%.”

“And people will wind up paying the difference,” Seidon said, doubting the reassessment will significantly help the taxpayer in terms of saving money.

Dashield denied the reassessment would have a substantial impact on the budget, speaking mostly to the appeals process. “The real impact on the budget is staff time and attorneys’ fees,” he said, not mentioning the $1.3 million in returned tax rebates for last year alone.

Dashield acknowledged appeals would continue even if the reassessment is done and its implementation does not halt the appeals already in the process or restrict new ones from being filed.

File you may, but beware the purpose of appeals process is to contest the value of your home and as a result possibly reduce your taxes. The objective is not to protest property taxes.

“Many people go in to complain about taxes,” said Schneck. “If you try to talk about taxes they will bar your testimony.” The purpose of the County Board of Taxation and the tax court in these cases is to discuss the value of your home and determine whether it was assessed accurately, Schneck explained. “That’s very clear in the law.”

Siedon is all too aware of that law. “I think people who are concerned about taxes shouldn’t live in Essex County,” she said wryly. But if you do, Schneck offers some guidance. “My advice to people is to look at tax assessment notice when they receive it in February.” That will give homeowners enough time to make a decision about appealing.

And the good news is you can always appeal. “You can appeal your taxes every year for the rest of your life if you want,” Schneck said. Just remember in order to appeal, you must pay your taxes.

The deadline to appeal in a year for which a reval or reassessment has been done is May 1. All other years the deadline is April 1. Does anyone see the irony of that?

Here’s a snapshot of one Montclair property and its escalating taxes. This house at 183 Grove, is currently for sale. Taxes on the current listing sheet are $33,418. When the house was for sale in 2007, taxes before the house was purchased in June of that year were $17,688 on the listing sheet. And the prior sale of this house, back in $1997? Taxes were then listed at $10,296. How about you? What’s been your total tax increase since the reval and does your property’s assessed value jibe with the current market?

83 COMMENTS

  1. What a dog’s breakfast. What is this story about? It’s like reading someone’s notes.

    What, for instance, does this sentence mean: “Dashield acknowledged appeals would continue even if the reassessment is done and its implementation does not halt the appeals already in the process or restrict new ones from being filed.”

  2. I don’t understand why the town simply doesn’t lower all assessed values by, say, 20 percent across the board. If your home is assessed at a million bucks, it changes to $800k. If it’s now $500k, it changes to $400k. Surely it’s safe to assume that relative neighborhood values haven’t changed dramatically since the reval three years ago.

    With a completely new reval, the town will open itself up to another boatload of appeals.

    It would have been nice if this story addressed the likelihood of the application for a new reval being granted so soon on the heels of the last one. If I were on the Co. board that considers applications, I would have to question the judgment of local officials who are so eager to spend another bunch of money on a reval circus.

  3. (LOL!!!! “It’s like reading someone’s notes.”)

    I’ve appealed 3 times and won a substantial decrease twice. I’ve also convinced a friend that he didn’t need to WASTE his money on an attorney. After saving 200+K, he’s a convert. It’s a simple process that any fool can do. I stand as an example.

    Reassessing is a waste of money because, as the notes above suggest, the town will simply raise taxes accordingly. To be clear: the town is ALWAYS going to get more and more tax dollars no matter what your individual value is– because they set the tax.

    But, then again I hear that “people who are concerned about taxes shouldn’t live in Essex County.”

  4. what a mess this story is. I think it actually misinforms more that it informs.

    It does not matter how the assessed value relates to the actual market value. The assessed value is only a snap shot of the valuation of the entire town at the time of the reval. What matters is your assessed value of your home relative to the assessed value of the entire town from the same reval. If your home is worth 80% of its assessed value and the entire town is in the aggregate worth 80% of its assessed value then you are paying your fair share.

    The only basis for an appeal is if your house’s actual value has fallen MUCH MORE than the actual value for the town in the aggregate.

  5. “If I were on the Co. board … I would have to question the judgment of local officials…”

    You just proved yourself ineligible to be on the county board.

  6. ROC, that has always been my understanding. So then, how is it fair that good ol’ prof has appealed and will keep appealing while many others understand/accept it’s all about proportion, not absolute value? I’m assuming he has not not taken a sledge hammer to his house and decreased its value more than it has decreased just due to the current real estate market. It sounds to me like appeals are often granted based on actual market value. How much money has the town lost because people are not paying their fair share?

  7. Remarkable. I don,t understand why so many intelligent people want to pay outrageous taxes for bad services. There are many surrounding towns that have lower taxes and better services.

  8. I’ll gladly pay you Tuesday for a hamburger today. Until we have a council that believes budgets should be based on the actual revenues we will continue to have them come to us to pay for budget items they think cannot be cut.

  9. careful gurl. It sounds like you are being “mugged by reality” you’ll end up voting for conservatives if you are not careful.

  10. Here’s your problem folks. For 2010 tax year Montclair’s Chapter 123 common level range was 99.30 (https://www.state.nj.us/treasury/taxation/pdf/lpt/chap123/2010/chap123ess.pdf). That means the average home that sold in town during the sales period analyzed was assessed at 99.30% of the sales price. Unless the town was gaming that number to limit the reductions successful appellants would get after winning an appeal, that means that on average, assessments were right about at market value.

    If your home was assessed over market value, you were indeed overassessed compared to your neighbors, and perfectly entitled to appeal. Doing so was not a selfish act, it only corrected an inequity in your assessment. You were paying more than your fair share and your successful appeal corrected that. This is why there is an appeals process that exists outside of revaluation years.

    Now look at the number for tax year 2011 (https://www.state.nj.us/treasury/taxation/pdf/lpt/chap123/2011/chap123ess.pdf). The average ratio for Montclair is now at 103.47% This means the average home that sold in town was overassessed – but only by about 3.47%. It shows a slide in home values of about 5% YOY. But look at the houses on the market and what they have sold for this past year. Plenty of homes are selling way lower than 3.47% below their assessed value. There are homes that are selling for 10% or 20% below their assessed value. There are still a sizeable number of homes that are selling for 10% or more above their assessed value.

    The last five years have not treated all home values in town equally. There is a lot of inequity in the current distribution of the property tax burden. A reassessment should alleviate that, and it should lower the number of appeals filed, and lower the legal fee and refund exposure that is currently hammering the town. This is a win for everyone. Everyone that is except those who are relatively underassessed today. If the reassessment is done correctly, those homes stand to see a sizeable property tax increase.

  11. ROC-

    You are 100% correct (as usual) . The article is very misleading. The reval was a long process and if you don’t understand how it works by now then you are not paying attention.

    If everyone has the same assesed formula then it doesn’t matter. Simliar to when residents home were valued at say 120K thirty years ago and selling at 500K years later. Just in reverse. It makes no difference if your house went under reval at the peak or bottom of the market because everyones house was valued under the same standard. If you feel your value is incorrect then simply appeal it. The problem is that these revals are usually close to being spot on. If the market is going down then so are your nieghbors. It’s not like values go down so does the overall taxation dollars Montclair raises.
    Reval is not the towns fault, Essex county manadated there be a one. Revals are costly (and divisive among residents) and the tab is picked up by the town. I’m sure they town would have rather put the money towards something more useful…like a skateboard park, lol.

  12. I guess the prof’s PALATIAL estate in UPPER montclair 🙂 has lost value compared to other less tony parts of town. Palatial estates just aren’t what they used to be.

  13. Being able to balance a town budget takes a smart person with balls. I’m tired of hearing ‘next year’. We’re thinking about taking a hit and buying a house with an apartment in Brooklyn where we can expect our tax bill to be about 2k on a 1mm home and we can get rental income.

  14. Walleroo – The town can’t do a straight line reduction. That would likely be illegal. The assessments are supposed to be based on an actual number – the actual value of your property as of Oct 1 of the previous year. 5 years will have passed since the previous revaluation by the time the next reassessment happens (if it does). Homes do not rise and fall in value in lockstep. If they did, we would never have to have a reassessment/revaluation, we could just have a computer reset the numbers every year.

    And as far as “If I were on the Co. board that considers applications, I would have to question the judgment of local officials who are so eager to spend another bunch of money on a reval circus.” Don’t knock potentially the only smart thing the town is doing to right this fiscal trainwreck (although we should have done this 2 years ago). Plenty of smarter towns that revalued in the last several years saw the light on the oncoming train and have already done this. Manalapan, Chester, Mendhams, and quite a few more.

    Tudlow/ROC – Have either of you actually analyzed the real numbers behind sales/assessment data in this town? If you haven’t then stop whining. I’ve taken the time to create a database of the entire town’s data for the past 2 tax years and have studied trendlines before filing my appeal. There is plenty of unfairness to be found. Try it yourself. It’s quite easy to do and the data is pretty shocking.

  15. ” Homes do not rise and fall in value in lockstep. If they did, we would never have to have a reassessment/revaluation, we could just have a computer reset the numbers every year.”

    Then what evidence do you have that the number of appeals (or even successful appeals) will drop with yet another revaluation? It seems obvious that in an economy like this with rapidly falling home values there will be lots of “noise” in the data no matter how carefully you do the revaluation. Whomever the “noise” effects the most will have a basis for appeal. Are we just going to spend a lot of money for another revaluation and simply change up the specific people appealing?

  16. “I’ve taken the time to create a database of the entire town’s data for the past 2 tax years and have studied trendlines before filing my appeal. There is plenty of unfairness to be found. Try it yourself. It’s quite easy to do and the data is pretty shocking.”

    And another revaluation will fix this? What makes you think so?

  17. I appealed this year, and didn’t use a lawyer. You do have to hire an appraiser and pay the filing fee, but for me it was money well spent. The county agreed with my appraiser’s number, and offered me a settlement, so I didn’t even have to go to a hearing. I think this was because my house was so clearly overvalued–not by 3% but more like 15% or more.

    I struggled with the “fair share” issue for a while, which is why I didn’t get around to filing until 2010. But if your home was worth $200,000-$300,000 less than your assessed value, I wouldn’t expect you to pay taxes on the difference. Values have not dropped equally for all types of houses in Montclair–that’s just a fact.

  18. ROC – Maybe I am being a bit of an idealist here. Honestly, the truly selfish route for me would be to say no reassessment. I will then continue to appeal and lower my own assessment and taxes each year that the market continues to fall. Win for me.

    I am thinking more about my neighbors and a lot of other people like them in town who got massively screwed in the last revaluation and don’t know how to appeal, and don’t have the cash to pay an attorney to do it for them. There are seriously people in this town who live in homes worth less than $500k that are overassessed by $200k or more. That’s a lot more than their fair share they are forking over to the town every year. These are seniors living on fixed incomes that are going to be forced from their homes over this.

    In 2006 the town and ASI went agressive on a lot of the numbers because the real estate market was going up, up, up. Hopefully in 2011, they would see the writing on the wall, and be more conservative with their estimates and also leave in a 5-10% buffer to protect the town a bit from further market declines.

    Look at Glen Ridge – they revalued the year after us, and their assessments are still below markey value – only 94.96%. Bloomfield revalued just last year and their assessments are at 89.35%. They will not have the same magnitude of appeals issues that we currently have.

    This can be done in a fair way to protect the town. Now if your point is that you just don’t trust Montclair to do it right, well your point would probably be valid and I just don’t have an answer to that.

  19. Another revaluation is not needed to “fix” it. Because by it happens, prices will be SKY HIGH again, and they’ll complain about folks not paying their fair share.

    These fools are only looking to raise taxes. Because, they believe, raising taxes is THE ONLY answer to EVERY question.

    As for my Palatial Estate in UPPER Montclair, “It is real and it is Spectacular!”

    But each home, for a tax appeal is compared to other “comparable” homes. For my Estate, I had to find others with the same or near same expanse of grounds, rooms and facilities to make my point.

    Fortunately, I was able to find a few nearby.

    But the Town made the argument that my Estate is HUGE and special and I should pay accordingly. I made the argument that it is just like these other 3 that sold for much less– and I’ve been successful.

    If some cannot be bothered to appeal God Bless ’em!! We need more folks to just be mad and not do anything.

    JUST. KEEP. PAYING.

  20. Oliver – You don’t have to hire an appraiser, although it does make the process easier for you. You can go to hearing or settle with the town strictly on sales comps. If your comps are good, you will likely succeed this way too.

  21. “Not another revaluation – reassessment. Not the same thing.”

    The two terms are conflated in the Bnet story:

    “When the town did the reassessment, the taxes went up a tremendous amount,” said Robin Seidon”

    Why didn’t the story make the differences clear? How about explaining it in detail.

  22. I concur with Herb, ROC is totally correct. The item and most of the comments are totally confused, particularly Walleroo’s misunderstanding of how evaluation and taxation work.
    The professor’s reported experience with three appeals might be misleading. His appeals were not in consecutive years (probably decades apart) and only two were successful. No indication of how much valuation was reduced (probably by compromise settlement)nor how much tax savings resulted. For the appeals I have handled the ultimate tax savings required several years just to recover the filing fee and the time and cost of assembling comparative data.
    Unless your house assessment is out of line with all the other house assessments an appeal is a waste of time and waste of town expense.

  23. Right on ROC. That sentence attributed to Seidon should have read: “When the town did reassessment some peoples’ taxes went up (if they had not been assessed in long time and were way below true value) and other peoples’ taxes went down (if they had recently constructed or purchased and were assessed at true value).”

  24. p.s.

    Gator, in a severe down market the homes that will fall the most as a percentage of their assessed value are the luxury, high end homes. In a down turn like this the high end homes will fall more because people will opt to buy more moderate homes at a higher rate. So it makes sense that the high-end home owners who figure this out will make more appeals because in terms of % decrease in value they’re getting hit harder.

    Now if a reassessment is done then the burden will be taken off those high-end homes more than on moderate homes. I’ll bet moderate homes have less volatility and low-end homes even less volatility simply because they have less intrinsic value.

    So will the “burden” be moved from more volatile high end home and placed on less volatile moderate homes?

  25. ROC – This is a sticky wicket. 2006 revaluation transferred a lot of the tax burden to more modest properties, because in the run up of the market started homes appreciated at a much higher percentage than high end homes.

    Also at market peak, almost any old POS sold quickly and overasking. Even when the property had defects like undesireable location, need of renovation,etc. Today those homes rot on the market and don’t sell.

    When I studied the numbers last year, my analysis actually showed that if your home sold for less than $700k, it was almost twice as likely to be overassessed than homes that sold for above that amount. I’ll have to go back and look at my files for this year. I believe I saw less of a disparity, but don’t want to quote specifics that I am not certain of.

    The high end homes that I saw settle with the town on the day of my hearing were getting reductions in about the 10% range. Many of my more modest neighbors are getting reductions of 20-30%. It is that bad in some quarters of town.

  26. walleroo – A revaluation requires inspections of each and every property in town. A reassessment uses the property record card data obtained from the inspections conducted for the previous revaluation in order to compute more currect assessments. Both are done townwide, but since a reassessment does not require inspections, it is much less costly than a revaluation.

  27. I believe walleroo that a reassessment is done on paper with data on hand and a revaluation is the door-to-door-guy-with-a-clipboard process.

    I’d love to know the exact process. An on-paper process sounds MORE likely to engender appeals to me.

  28. You seem to know more about this than I ever will, gator, so what exactly is the town proposing to do? What in god’s name is the difference between a reval and a reass? The town wants to go in and recalculate the relative value of all homes, right? How is that not a reval?

  29. ROC – We’re likely both a bit right. The high end and the low end will drop a lot. But if you have a nice, updated home in the middle, watch out. You might get hammered.

    But keep in mind that my analysis also shows that if you are on the high end, you were much more likely to get a more generous (read lower) assessment out of ASI back in 2006.

  30. Sorry, our posts crossed.

    So the reass will turn the clock back to what we had right after the reval a few years ago, though at a lower absolute level.

  31. The town wants to reassess, not revalue.

    The logic in this is that it is less costly, and that the last inspections were recent enough to allow for a fair paper (really computer) reassessment.

    This means that the town will accept all the lot size, SF, condition data that ASI gave them during the last revaluation and look at all new sales data from the last 2 years. They will use that new sales data to compute new market values for all properties in town.

    Hope that clears things up.

  32. “The high end homes that I saw settle with the town on the day of my hearing were getting reductions in about the 10% range. Many of my more modest neighbors are getting reductions of 20-30%. It is that bad in some quarters of town.”

    Yeah when was that? All over the economy high-end goods are getting hammered more than low-end goods. (which stands to reason).

    I have no data. But it seems obvious that high end homes will be more volatile because they have “farther” they can go.

  33. I really can’t understand why Bnet is not reporting the mayor’s comments on patch? Are you that insecure? it’s a pretty hot issue at the moment. Should we not count on Bnet to cover it? At the very least it should get some “fair use” quotes and a link with a line about the mayor not returning your calls for comment.

  34. “They will use that new sales data to compute new market values for all properties in town.”

    How? With some algorithm which makes some assumptions by neighborhood no doubt.

    Totally ripe for further appeal.

    We’ll change WHO is appealing not HOW MANY.

    (sounds like Montclair.)

  35. ROC – It’s all relative, right? Low end homes in our town are getting hammered because no one wants them. They are not selling period. During the market run up, people got priced out of better neighborhoods and properties and settled on the lower end homes thinking they could fix them up, the neighborhood would gentrify, etc. Now that the market is dropping like a rock, those that still want to buy no longer need to settle – they can buy the mid-range property that used to be out of their reach. And your former high end buyers will also settle on the midrange property.

    Do you want to buy a house on Mission Street if you don’t have to?

  36. Mr. Mayor writes, about the failure to pass the budget for 2010:

    It was not surprising that we mostly got ideas for NEXT year’s budget, all of which are part of an ongoing dialog.

    What dialog? I haven’t heard a goddam thing!

  37. The underlying problem is the way houses are assessed in dollars. If we would use a percentile of the town ‘share’ it would be fairer.

    Any improvement in one house (think extensions and substantial improvements) could then have immediate impact on the share of all other properties and could be reflected on a yearly basis. These calculations are trivial today with computers, but are no to impossible to do without.
    Hence we have to deal with the current arcane system.

  38. “Now that the market is dropping like a rock, those that still want to buy no longer need to settle – they can buy the mid-range property that used to be out of their reach. And your former high end buyers will also settle on the midrange property.”

    Precisely. So mid-range homes are holding their value the best. So a reassesment will shift burden from high end to mid range homes.

    I don’t know what your experience was but I did not see low end homes being snapped up in the run up. I saw the crappy marginal mid-range neighborhood homes being bought and being fixed up or torn down and new homes built.

  39. “The underlying problem is the way houses are assessed in dollars. If we would use a percentile of the town ‘share’ it would be fairer.”

    would you really find it helpful or understandable to be told your house was worth .000210 of the town’s value? And your neighbor’s house was .000204 ? I think there is a need that the assessments be in a readily understandable form. I also think we should avoid doing revaluations at market highs or we should expect lots of appeals. I think any process will not be perfect and some number of appeals are normal and even helpful to making the process fair.

  40. In Glen Ridge, we bought in 2006 and were reassessed in 2008/2009. We upsized to a place that had taxes of $17,000+. After revaluation, the taxes went to $24,000. Its been two years and they are now at $26,500. The funny thing (not for me) is that my old house, a 1400 sq ft. colonial down on Carteret St., went down by $2,000 (from 10 to 8). I mean really, is that necessary? My taxes go up in the new house, while the taxes on the old house, which complained about to no end at 10k, went down to 8k. I think someone up there is really pissed off at me.

  41. A more fair way to do assessments would be to reset them all to market value every year. This is done in states like Florida (minus their arcane homestead laws that tax new purchasers at a higher rate for the same house than people who have lived there for years). Every year you get a TRIM notice with your property’s value for that tax year. Every year, the value of every property is adjusted.

    You can only appeal if you are over market. And if you are successful at appealing, theoretically you get no unfair advantage, because everyone’s assessment is adjusted every year.

    In NJ outside of a revaluation/reassessment year, if your town’s average assessments are below market value, the town gets up to a 15% buffer to protect against appeals. If the town average is at 80% and your home is assessed at 90%, you are paying more than your fair share, but tough luck to you. Do you want to pay 15% over and above your fair share of this town’s obscene taxes? There’s nothing fair about that.

  42. ROC – I saw a lot of needs work multi-family properties being purchased, fixed up and converted into nice, single family homes. That’s not happening now, and try and sell an “investment property” in this town with taxes as high as they are. No way to make money as a landlord at peak prices plus the ever increasing taxes. ASI valued our property at $640,000. A bigger home on the same street with a bigger lot sold last year for $440,000. That’s over a 30% drop, and that’s as of last year. No way we could get that for our house today.

    So forgive me Mayor Fried, if I selfishly don’t want to overpay my taxes by 30%. I know I should want to pay for bike lanes instead of paying to send my son to college one day.

  43. This is what I don’t understand. If your house was valued at $640,000, wasn’t the other property that sold for $440,000 also valued at something close to $640,000?

    If both homes were assessed at the same value and they are comparable homes, then it’s not about what you could “sell” for now, it’s about comparable value for comparable homes.
    I don’t want to know what the house sold for in a crappy market in which some people are forced to sell at bargain prices. I want to know if that home has an assessed value close to yours. If it does, than you’re paying your “fair” share.

  44. jerseygurl – The home that sold for $440k had been assessed at $657k. It’s now assessed at $440k.

    But I can show you 5-10 other homes that sold last year for that much money over their assessment.

    It is all relative. And the town says that relative for last year was 99.30% of market value. If that number is true (and I have no reason to believe it is not), then the home that sold at $440,000 would have been fairly assessed at $436,920.

    So explain to me, why that homeowner should be expected to pay taxes on an assessment of $657,000.

  45. And one more thing – the legal standard here, as set by the state of NJ, is what your home could have sold for as of October 1 of the previous year. That is the law. It isn’t changing. The township needs to do what it has to do to set legally defendable assessments in the confines of the current law.

    That we have continues to bury our heads in the sand about this for the past 2-3 years has only made a bad problem worse.

  46. “So explain to me, why that homeowner should be expected to pay taxes on an assessment of $657,000.”

    because THAT was the value when the assessment was done. It’s relative not absolute value. Before the revaluation homes that sold for a million were assessed at $300,000. Assessed value is not the true value.

  47. re reading the Fried op-ed on patch it really is a piece of work.

    When do the council member fines kick in? Anyone know? (looking at you baristanet).

    Also Cary this would be a great opportunity to rebut the Mayor here on Baristanet.

  48. ROC – The relative standard for 2011 is 103.47%. Every house in town does not turn over every year. There is not a townwide reassessment or revaluation every year.

    This is why the state analyzes EVERY useable sale in a town over a given one year period to determine the fair standard for that town’s assessments for the current tax year. The state of NJ is saying that currently – for 2011 – the average home in the township of Montclair is assessed at 103.47% of it’s true market value.

    If your home is assessed at 110% of what it could have sold for on Oct 1 of this year, it is not fair for you to be taxes at a higher rate than those of your neighbors, simply because 5 years ago the values were equal.

    The state recognizes this. That is why there are common level ratios and upper and lower limits to keep tax assessments relatively fair as years pass after a reassesment/reval. Disclosure – at the current tax levels I feel that the normal 15% is too high and should be tightened up.

    Now unfortunately for the township of Montclair, there is no 15% buffer, because the state says it is not legal to ever assess a home for more than it is worth. This year, people at the average ratio can still win.

    This is the law. This is the bad hand the township has been dealt. Ignoring it only makes things worse. People assessed over market can, and will appeal and will likely win. The only thing the town can do is attempt to equalize this and set values at a defendable number.

  49. The reass will lead to fewer appeals because basically it will lower everyone’s assessed value down, closer to current market rates. So under a reass, your assessment could stay the same in absolute terms, but rise or fall in relation to everyone else’s, and you’d wind up paying more or less than you do now.

    Say your house was assessed at a million bucks, but you appealed it down to $500k. Then the town does a reass, and your house is still $500k, but your neighbors have been lowered too, so you will wind up paying more in taxes.

    That right, gator?

    The rub is, you wouldn’t be able to appeal successfully, because the comps would show that your assessment value is accurate at $500k.

  50. there will be winners and losers. In any revaluation/reassessment some of the losers will appeal. What makes you think walleroo an algorithmic process will get it right by a larger percentage?

  51. It’s relative not absolute value

    ROC, this is where you are not only relatively, but absolutely, incorrect. As gator correctly points out, your taxes by law are supposed to be in relation to the value of your house at Oct 1 of the prior year. That’s why people take the trouble to appeal year after year — the last snapshot of values was taken at the market peak, so pretty much anybody who goes to the trouble of appealing has a good chance of winning now.

    In other words, relative values of one property versus a comparable property probably haven’t changed much, but what matters when the tax bill comes is the actual value of your house on Oct 1 of the prior year versus the assessed value applied by the town.

    Many of our neighbors have exercised their right to go to the government and say, “you are taxing me on $640,000 worth of house, but I have evidence that houses like mine are now only worth $440,000 — so you have no right to tax me based on the higher valuation.” A reassessment would (speaking in rough terms) set the tax basis for the house in question at $440,000, but would do so for all properties in town. This would greatly reduce the success rate of appeals and level the playing field (because it would not be a winning argument to appeal by saying “houses like mine sell for $440K and you are taxing me at a house value of $440K”).

  52. Walleroo – generally this is correct. Like I said I potentially make out like a bandit if the town does nothing. I still want a reassessment for the town because it is the right, fair thing to do.

    And not everyone who has appealled will necessarily see a big tax hike. Some of us are still overassessed. If I crunch the numbers, I’d say I’m assessed a good 10% above where I should be. So potentially with a reassessment, I could see my taxes stay the same or even decrease a little more after a reassessment. What I don’t have to do hopefully is spend the time, energy and money I have been in the last 3 years filing continual property tax appeals.

    And the town is getting hammered on this. Let’s stop the budget bloodletting this has been causing. We don’t have the money to burn.

  53. “ROC – I’ve emailed the mayor asking him to supply us with his statement.”

    You can’t use some “fair use” quotes from his op-ed at patch? Those comments are made in public. If you are trying to keep readers from going to patch, not reporting the comments will have the opposite effect.

    You guys quote other sources all the time.

  54. Liz, you are engaged in a knock-down drag-out with Patch. Shelly Emling appears to be taking the political coverage very seriously, writing all those articles herself. You guys, by contrast, mainly delegate that stuff to the junior staff. (To wit, today’s mishmash on the reass.) Patch has the favor of Mayor Bike Boy Wishy Washy. You have Cary “play the middle” Africk.

    On paper, Liz, you’re golden. You got the stuff. (Boom chick-a-boom…) But you guys are too much McCellan, not enough Grant.

  55. So basically, you can appeal and win just because your values went down? That makes no sense. Everyone’s values went down, even your neighbor’s. So if two homes were assessed at $640,000 and one sells now for $50.00, you can claim your house is worth $50.00? I understand the concept that some homes may have dipped more than other homes in Montclair, but I don’t understand the claim that the neighbor’s home sold for $440,000 so even though we are both assessed at the same amount of $640, 000 one of those homes should be reassessed at $440,000. Then the whole block should be. So should the next block. So should the entire town.

  56. Some of us are still overassessed. If I crunch the numbers, I’d say I’m assessed a good 10% above where I should be. So potentially with a reassessment, I could see my taxes stay the same or even decrease a little more after a reassessment.

    The fact that you may still be overassessed now, gator, is irrelevant. In a reass your absolute assessment could go down, but if your neighbors’ assessments go down by more, your taxes could still rise. And you would have no grounds for an appeal unless prices dropped even further.

  57. @ROC :

    “would you really find it helpful or understandable to be told your house was worth .000210 of the town’s value? And your neighbor’s house was .000204 ?”

    Yup, it would make it more clearer for me. And I would expect to get a letter every year that my ‘share’ dropped by X due home improvements in other homes. multiplying this value against total budget minus ratables would give me my tax share.

    instead of percentile we can also use “Montclair oranges” or “MTC Shares”, main point is that my share gets updated every year.

  58. “In other words, relative values of one property versus a comparable property probably haven’t changed much, but what matters when the tax bill comes is the actual value of your house on Oct 1 of the prior year versus the assessed value applied by the town.”

    right, and the “The relative standard” determines if your are over or under charged, correct.

    Unless your actual value differs from the assessed value multiplied by the The relative standard, you don’t have a basis for an appeal.

    So only if your assessed value is greater than 103.47% do you have a basis. Correct?

  59. jerseygurl – I agree 100%. But the town is doing nothing. And individual homeowners have the legal right to redress. The problem is with the do-nothing town, not with the taxpayers that are challenging their assessments. Homes in my neighborhood have been selling below assessments since 2007. The town has made significant settlements (or lost appeals) with many residents in our area. While they have reduced the assessment for the home across the street from $657,000 to $440,000, my next door neighbor’s home sits assessed this year for over $700k. A significantly larger home than theirs sold down the street for $490,000 last year. That homeowner likely got an assessment reduction to sale price as well.

    NJ law is very clear that it is the town’s responsibility to correct these inequities, even outside a reassessment/revaluation year. That our tax assessor does nothing is to everyone’s detriment.

    “REVALUATION, REASSESSMENT AND
    COMPLIANCE PLANS
    The need for revaluation/reassessment
    may be shown by any evidence which
    indicates properties in a taxing district are not
    assessed at the same rate of true value.
    A revaluation/reassessment program
    tries to distribute the tax burden within a taxing
    district by appraising each property according
    to its true value and assessing it for taxation
    based on that true value.
    During a revaluation inspectors will
    take exterior measurements and photographs
    of all houses and structures. Inspectors will
    also determine the amount of living space,
    condition of kitchens and bathrooms,
    basements, foundations, etc.
    If assessment variations are
    substantial and without pattern or trends in
    value, a revaluation or reassessment of the
    entire taxing district might be the best remedy.
    If assessments in one part of the
    district are generally too high or low, the
    assessor may be able to adjust values to bring
    them in line with assessments on other
    property provided the adjustments are applied
    on an areawide basis via a compliance plan.
    This is assessment maintenance.
    An assessor is not allowed to reassess
    property based only on its recent sale. That is
    “spot assessing.” The Supreme Court decision,
    Township of West Milford v. Gerald and
    Juanita Van Decker, affirmed: “The practice of
    reassessing properties solely because those
    properties have been sold in the previous year
    is unconstitutional because it shifts the tax
    burden to new owners in the municipality.”
    While assessors are prohibited from
    singling out property for increased
    assessment, they have a statutory obligation to
    monitor all indicators of property value and to
    correct inequities in tax years other than years
    of districtwide revaluations/reassessments.
    Assessors must obtain prior approval for a
    revaluation, reassessment or compliance plan
    from the county tax board and/or the State
    Division of Taxation”

    https://www.state.nj.us/treasury/taxation/pdf/lpt/ptassessment.pdf

  60. ROC – 100% is the legal upper limit no matter what the average ratio is. So in 2011 if you prove that you are assessed at 101%, you would still win your appeal.

    Note though that this is the first year since the revaluation that the average ratio was actually above 100%.

  61. So only if your assessed value is greater than 103.47% do you have a basis. Correct?

    No. Not correct. The government can’t tax you on an assessment figure that is more than the value of your own property, period.

  62. “100% is the legal upper limit no matter what the average ratio is. So in 2011 if you prove that you are assessed at 101%, you would still win your appeal.”

    Oy. Then we’re hosed, totally hosed. What colossal stupidity then to do an assessment at a market peak. You guarantee an appeal melt down.

    It makes no sense to cap at 100% . We’re going to then have to do an on-paper reassessment on an annual basis if the market continues to fall.

  63. If this is the case, apple, then the town should do a reassessment every time there is a significant dip in the real estate market, correct?

  64. Correct (if there’s a big enough dip in values to increase the likelihood of successful appeals).
    As far as revaluing at the market peak:
    1) valuations had gotten terribly out-of-whack in the other direction, and
    2) at the time, very few people could identify “the peak” for what it was

  65. 2) at the time, very few people could identify “the peak” for what it was.

    I disagree. Sure, no one knows when the absolute top will be. But it was very clearly a high water mark.

  66. And that’s what NJGator is saying. We are F****D. All of us can appeal because our homes are likely to be assessed at 110% – 120% of their value. So yes, the town has to do a reassessment in order to “set” values that reflect the current market. She’s also right about relative differences. In a strong buyer’s market, people will make lowball offers on better properties, because someone will bite, rather than buy a less desirable property. I’ll bet ROC has already downloaded the paperwork necessary for an appeal. I’m definitely going to get comps for my neighborhood.

  67. tudlow – Correct. And better run towns have already done so.

    ROC – You may disagree, but the law is the law. The state would have to change it. And I happen to disagree that it should. It’s the town’s responsibility to keep the assessments legally defendable. We choose not to do so and concentrate on bike lanes, parking lots and worthless proclamations instead. That does not mean the law is broken.

    Other towns were smarter. They did not assess as agressively, so they gave themselves some breathing room to protect against market declines. Other towns like Middletown in Monmouth County defied their revaluation order (there is apparently no fine for this), waited a year or two and then also assessed low.

    Like in so many other areas of our town government, we are poorly and not strategically run. This is no one’s fault but our own. BTW, we pay our tax assessor $98,384 to ignore stuff like this. https://php.app.com/NJpublicemployees10/details.php?recordID=113400

  68. “I’ll bet ROC has already downloaded the paperwork necessary for an appeal. ”

    it’s like you have a camera in my office.

  69. Thank you, apple. Brevity is the soul of wit, the soul of lingerie, and the soul of one understanding the reassessment process in Mtc.

  70. And here’s to Fried’s complete lack of understanding on the topic of tax appeals.

    “Along with this are the many property tax appeals which benefit the few and harm the many.”

    Arrogant and misinformed. Our mayor would do well in China.

  71. appletony3 – dig the pic 🙂

    also – does anyone know how as a renter I can find out how much the taxes are for the house I live in???

  72. kharing – You can look up the address at:

    https://tax1.co.monmouth.nj.us/cgi-bin/prc6.cgi?&ms_user=monm&passwd=data&srch_type=0&adv=0&out_type=0&district=0713

    The tax amount listed may be for 2009. To get the current yaxes, multiply the assessment by the 2010 tax rate (which won’t be set until the budget is passed). If your landlord filed and won a 2010 tax appeal, the new assessment will not be reflected in this database. Neither will added assessments (for improvements) that occured after the town certified the 2010 tax year assessments to Essex County.

  73. Thanks, kharing_lover — I’ve got a full size reproduction of it in my office (would that it were real) and it does a lot to liven up the place! You should be able to look up the tax burden for your building on zillow or trulia

    Tudlow, brevity is the soul of wit, but for lingerie, I fall into the “absence makes the heart grow fonder” camp!

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