Appealing Your Taxes? Better Hurry

Attention procrastinators: if you have spent the winter avoiding the thought of your rapidly rising real estate taxes, do not despair.  The deadline for filing a tax appeal in Essex County is April 1, or May 1 for towns that have undergone a recent revaluation.

One Maplewood homeowner, who wanted to remain anonymous, admitted to feeling paralyzed about taking the first step.  “We haven’t done anything yet about appealing,” she said.  “It seems so overwhelming.”

But although time is running out, it is definitely not too late.  “As long as the appeal is filed by the deadline, it is fine,” said appraiser Craig Smith, who is still accepting clients who wish to appeal.  Smith charges a $600 flat fee, which includes the appraisal, filing the appeal and testifying on the owner’s behalf in court.  (Smith can be reached at 973-714-9248). 

Smith, who works all over Essex County, emphasized that high taxes alone are not a reason to appeal.  “If your assessed value is higher than your market value, that’s the key,” he said.  A 10-15% variance between market value and price means a homeowner should probably go ahead with an appeal.

DIYers can file an appeal directly at the Essex County Board of Taxation by using the application form. Read the application closely as it contains a wealth of useful information. 

Basically, filers must demonstrate the market value of their property as of October 1 of the previous tax year. They can utilize various items of supporting documentation, including an appraisal and comparable sales.  According to the application: “The most credible evidence is recent comparable sales of other properties of a similar type in your neighborhood.”

“It’s not complicated, but it’s a matter of whether you have the time to do it yourself,” said Michael Schneck, an attorney who handles appeals throughout Essex County.  “You have to appear at the hearing, and you could be sitting there for half a day,” he said.

Like many real estate attorneys, Schneck charges clients a contingency fee.  In other words, if he succeeds in lowering your taxes, he will get 50% of your tax savings for the first year after the reduction.

There is also the filing fee, which ranges from $5-150 depending on your home’s assessed value, and the appraisal fee, which ranges from $500-700.  Schneck also noted that if the appeal is not successful at first, he will challenge the decision at the next level of the court system.

He warns people to pay close attention to those filing deadlines:  “Your application has to be at the County Tax Office with the filing fee by the deadline – not postmarked by then.”  Schneck will accept clients until March 25 who have to file by the April 1 deadline.

For those who wait until the last minute, Schneck had this to say:  “If a client calls me on April 1, I tell them to get into their car and drive to the County Tax Board in Orange.  Go to the 5th floor and file your petition.  Then send a copy of the filing to your local tax assessor.”

Finally, make sure to keep paying your taxes during the appeals process.  If you are not current on your real estate taxes by the hearing date, your case might be dismissed.

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21 COMMENTS

  1. This seems like an advertisement to me.

    You should just sell them a pop up add and make some coin off of it. For each winner there is a loser. The town doesn’t lose of revenue from a successful appeal any loss gets passed on to the other residents.

  2. The $600 fee is more than some people’s annual adjustment!
    We got ours…we aren’t thrilled but it’s not as bad as we imagined. My big pet peeve is why they waited 20 years between revals. We talked to people in our neighborhood who have lived there for 20 years or more and they said the last one was around 1990!

  3. You’re not a “winner” if you merely pay taxes on the current worth of your home, rather than an inflated number that reflects the height of the market a few years ago.

  4. Mrs. Marta – Might not pay to hire an attorney if you only expect to get a small adjustment. But for most towns you will get a savings for this year, and many years going forward if your town is not going to reassess/revalue in the near future.

    Montclair might very well be reassessing for 2012…in which case any savings a homeowner gets will only stand for one year. Many homeowners here might be better off going it alone this year, and then seeing what happens with the reval for the following year.

  5. Carolyn,

    Most folks don’t understand that they need to apply the Director’s Ratio to the “Assessed Value” on their tax bill to get their “Adjusted Assessed Value” – the figure that the tax board is using to calculate the value of their property.

    For Glen Ridge, this year’s Director’s Ratio is:

    94.96

    meaning that the Essex County Tax Board calculates that properties in GR are assessed at 94.96% of their actual value – that’s a significant drop from last year’s 91.61. The result is that Actual Assessed Values in GR will decline by just over 3.5% for 2011.

    The Director’s Ratio is used to adjust the Assessed Value on your tax bill closer to what your property might actually be worth.

    For example:
    My property is assessed at $410,000, and the director’s ratio is 94.96, according to the Essex County Tax Board, the Actual Assessed Value of my property is $431,761. ($410,000 divided by .9496).

    Here is a complete list of 2011 Director’s Ratios for Essex County:

    Town Dir. Ratio

    Belleville 82.93
    Bloomfield 89.35
    Caldwell 93.03
    Cedar Grove 94.55
    E. Orange 101.58
    Essex Fells 95.41
    Fairfield 103.90
    Glen Ridge 94.96
    Irvington 99.40
    Livingston 95.56
    Maplewood 89.26
    Millburn 93.12
    Montclair 103.47
    Newark 67.14
    N. Caldwell 92.76
    Nutley 90.80
    Orange 91.91
    Roseland 100.52
    S. Orange 102.17
    Verona 91.44
    W. Caldwell 92.84
    W. Orange 90.35

  6. As I’ve stated a few times here, you DO NOT need an attorney. Anyone who thinks doing this is hard, hasn’t been paying attention. So unless you don’t have the time to do some I understand. But all it takes is some time, simple research and math.

    Having appealed and won 2 out of 3 times, I sat through and watched others, spoke with the Attorneys and see no real benefit of a homeowner hiring someone. To this, recent comparable sales are all you need. And that info is easy to find.

    Moreover, if you haven’t appealed in a few years and your value is based on the market pre-Fall 2008, it should not be hard to find recent comparable sales that are significantly less that your home. Hell, last year it seemed they were OFFERING settlements to folks rather than even go through the hearing.

    So while I am an Attorney, this ain’t rocket science- or even 12th grade math.

    Good Luck!! Pay your fair share- and not a penny over!!!

  7. Carl – thanks for that useful list. The formula you describe is explained in the application form I link to in the article. I think you’re right, it is something that most folks don’t really know about/understand, but it’s relatively simple once it is explained. (However, I believe the figure for Maplewood is closer to 100% once the reval is factored in).

    prof: you’re absolutely right about using an attorney v. going it alone – it really comes down largely to time, as the attorney I quote points out.

  8. I agree with the prof here. I appealed last year without an attorney–although I did hire an assessor–and was offered a settlement for exactly the value I proposed on the form, so I never had to go to a hearing. And I will appeal again this year, because my home’s value has dropped again.

  9. One person appeals the tax and is successful, reducing the tax by 10%. Everyone else sees this and realizes the original reduction occurred to a comparable home, and thus theirs should be adjusted as well. Everybody has their home value appraised at 10% less than originally appraised. But the town still needs money—so nobody gets a reduction in taxes. If everyone appeals their tax, the only ones better off are the real estate attorneys. Everyone else might be worse off when you consider the higher taxes compensate the work involved with all of the appeals.

    Granted this doesn’t happen in practice because not everyone has the time or wants to put forth the effort. Home prices in the towns that make up Baristaville generally move together. For the most part you aren’t going to see comparable homes in one area drop 10%, and comparable homes in another drop 40%. If a million dollar home drops 20%, and a $300,000 home drops to $240,000—- that’s the exact same thing for tax purposes. Tax “rates” don’t care that you lost $200,000.

    If I was running a town,
    1) Someone on my staff would have the added responsibility of monitoring housing prices by neighborhood based on comparable sales–and I’d let the market dictate valuations instead of hiring an appraisal company to do this for every home. They aren’t doing anything special.
    2) I’d get rid of the appeal process altogether to make it fair for all citizens, rather than enrich the activists. Keeping the valuations current per measure 1) would allow this to work.
    3) Automatic appraisals for anyone updating/renovating/adding to their home.

  10. Bud,

    You make a number of good points, and much of what you propose, or similar proposals, make sense, and have been proposed by many, including myself.

    However, if you were running a town (as I have), you wouldn’t be allowed to do 1, 2 or 3. The towns (and the counties for that matter) have no say in how this is all done – the entire process is spelled out by the NJ State Constitution and NJ state law, as passed by various legislatures, and modified by many court decisions (One of which specifically prohibits your #3).

    One of the many reasons we need Initiative & Referendum…

  11. …was offered a settlement for exactly the value I proposed on the form

    If they took your first offer, oliver, it must have come in high.

  12. Walleroo, to your point, I know I could have asked for a lower assessment than I did. But I was trying to be fair, not undervalue my home. That’s why it bugs me when some people go off about how you’re not a team player if you appeal your taxes, as if we should all take one for the team by overpaying. There was no doubt in my mind last year that my assessment was too high by well over $200,000. This year it’s off by more than that again. But if you lowball the number, not only is it ethically wrong (in my opinion), but I would think you have a lower chance of getting a settlement. I would prefer not to devote a day to sitting in a hearing.

  13. Thank you good Prof and others. I intend to try this myself. This will be my first time and I have questions.

    To start, what kind of documentation do I need if I want to point to recent sales of other properties? Do I need something officially recorded with a government office, or I can print out from Zillow?

  14. Everybody has a different idea about what is ethical in situations like this, oliver. My feeling is that it’s a negotiation. If you want to arrive at a number that’s fair, you need to hold something back for the give and get.

    In my experience, the negotiating has always happened before the hearings start. Sometimes the lawyer will call you on the phone and try and settle. Sometimes it’s a chat in the hallway. I’ve never sat through a hearing. The idea fills me with loathing. I would rather pay the extra dough.

    If your assessment was off by 200k a year ago, and is off by another 200k now, it must have been worth a few million to start with, eh? You’ve done very well for yourself, oliver!

  15. Hi- I’m completing my tax appeal application. Is there a time frame that I must use when looking for recent home sale comps? Can I use recent home sale prices in the last few months?

    Thanks to anyone that responds!

  16. I am making my way through the paperwork as well. It appears that to use sales of comparable properties, they must have taken place before October 1 or last year.

  17. Not sure how this happened – but it seems my home is assessed for a bit less than even current comparable sales. Hmmm. Don’t tell anyone but I won’t have to appeal this year. I hope they don’t catch this when they reassess next year!

  18. jerseygurl – Don’t mean to be a Debbie Downer, but you should know they generally look at 2 years worth of sales when crunching the numbers for a revaluation. But on the bright side, your palatial 07043 estate is holding it’s value! Happy days are here again.

  19. The comps must have closed between 10/1/2009 and 10/1/2010. The directions stipulate that you have to ask for a reduction of 15% or more from your assessed value. If you think 10% is fair, do you still need to ask for 15% lower? I assume the assessor is pretty astute and may offer 10% based on your appeal.

  20. I had my appeal hearing yesterday and reached a satisfactory settlement (in the hallway) prior to the actual hearing. The town tax assessor was reasonable and appreciated my thoughtful analysis. The settlement reached was very near what I submitted as my proposed value. I used no attorney and had no appraisal. Just recent comp sales.

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