DIY Tax Appeals Part II

Yesterday I discussed New Jersey taxation law, how to determine your true value and some basics of DIY tax appeal research. Today we tackle picking comparable sales and the mechanics of the tax appeal itself.

Please note: this is in informal discussion of tips and tricks for DIY tax appeal filers. For more detail, please refer to this document published by the Monmouth County Tax Board.

Some hints to focus your comparable sale search:

  • Stick to your town;
  • Start with sales with the same bedroom count as your house;
  • Then pick sales with the same style.

If you have a four bedroom colonial, take a look at four bedroom colonial sales first. You may notice that the sale prices of four bedroom colonials in your town range $350,000 to $800,000. So how do you figure out which sales to use?

You should send me a check for this tip: pick comparable sales from the same zone as your property. If you are in the R-2 zone, try to pick comparable sales in the R-2 zone. The reason? Lot values within these zones tend to be fairly consistent, so you eliminate a big variable. In appraisal parlance, you have identified the Neighborhood. Once you have narrowed your search, identify the sales that are physically closest to you. Of these, pick the best three to five sales.

Red flag! Avoid sales that have phrases like, “short sale”, “foreclosure” and “bank-owned” in the Remarks section. These sales are distressed and may not be considered evidence of market value.

Now that you have your comparable sales, look at the sale prices and compare them to your true value. Does your home look overvalued by at least 15%? Then file an appeal to your county tax board.

There are pilot programs in Monmouth and Gloucester counties that have different calendars, but generally speaking, assessments are set as of January 1st and in January assessment cards are sent to every property owner. Tax Appeals must be filed by April 1st, or May 1st in a revaluation or reassessment year. Tax appeal forms are available online and some counties even have online filing systems. For single family homes, there is a small filing fee.

After you file, you will receive notice of your hearing. Hearings usually take place between May and August. You will have to provide the sales you will rely on at least seven days before the hearing date. Do yourself a favor and file your sales early. If you are unclear about anything, ask! There is no reason to have your case dismissed over a misunderstanding.

On the date of hearing, show up on time and check in. Most county seats are congested and parking can be difficult, so give yourself plenty of time to park and to find the hearing room.

When you are called, do not be nervous, the hearing officer will usually be quite sympathetic towards a homeowner presenting their case pro se.

Do not be emotional.  Do not talk about the financial hardship created by your taxes. Talk about the sales. Describe why they are all similar to your home and describe how they range from x dollars to y dollars. Tell the hearing officer why you think each sale is superior or inferior. It is o.k. to present sales that are higher than you think your property is worth, you just have to tell the hearing officer why. Here are some solid reasons:

  • Recent renovation
  • Bigger house or lot
  • Better location
  • Superior amenities

Some weeks later you will get a judgement notice from your county tax board. If you are unhappy with the result, you can appeal the decision to the State Tax Court or wait and appeal next year.

Good luck, and call me if you have any questions!

NJ Tax Appeal Filing Deadline is April 1

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