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?