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Assessed Value and Revaluation | Understanding Your Tax Bill | Budgets

What Is Assessed Value?

Your local Assessor in your municipality assigns a value to each property for tax purposes based upon its market value. Market value is defined as the highest price a property can be sold for on the open market as of October 1 of the pretax year.

How Is My Assessed Value Determined?

Your market value or assessed value is determined:

a.) The cost to reproduce the structure new, minus depreciation (any loss in value due to economic conditions, aging conditions, etc.), plus land value;

b.) The value of the property in comparison to similar properties that have sold,

c.) The value of the rental on income producing properties.

What Other Factors Affect My Assessment?

• Location
• Size of the lot
• Living Area of structure/Number of baths/Type of heat
• Basement area (finished or unfinished)/Age
• Condition
• Accessory buildings (sheds, cabanas, detached garages)
• lnground pool
• Decks
• Age of Structure

What Home Improvements Or Property Improvements Will Raise My Assessment?

Any improvement or addition to your home or property could raise its assessed value. If you are considering an improvement or addition, you should contact your local Assessor to determine whether it will affect your assessment. Cosmetic improvements such as painting will not affect your assessment.

What If I Don't Agree With My Assessment?

You should speak to your local Assessor. Show the Assessor comparable homes that have sold. Try to have three to five sales documented that have occurred in the last six months. The houses you choose to compare yours to should be in your neighborhood. The Assessor will make an appointment to visit your home to evaluate your property. After the Assessor has reviewed your home and comparable sales, he/she will advise you of their determination regarding your assessed value.

What If I Still Don't Agree With My Assessment?

You must file an appeal by April first with your County Tax Board. To file an appeal, all taxes must be paid in full up to and including the first quarter of the current tax year. The comparable sales proofs will be reviewed by the Tax Board. If they decide your property assessment is fair, your assessment will not be changed.

What Is A Revaluation?

A revaluation is a municipal wide updating of all taxable properties to their fair market value.

How Is A Revaluation Conducted?

Your municipality will hire a firm which must meet standards established by the State Director of the Division of Taxation and is subject to review by your County Board of Taxation. The revaluation firm will visit every property in your municipality to determine its value. When the revaluation is completed, every taxable property should be at fair market value, also known as 100% evaluation.

Why Is It Necessary To Have A Revaluation?

When it becomes evident that properties within the taxing district are not assessed at the same rate of true value, a revaluation may become necessary. These inequities may stem from changes in neighborhood, zone changes, economic trends, and, finally, because it is virtually impossible for an Assessor to review every property within a municipality.

When Is A Revaluation Necessary?

The County Board of Taxation can order your municipality to undertake a revaluation when they believe the municipality's assessments are vastly inequitable. Your municipal government may also voluntarily undertake a revaluation if they believe there are too many inequities in assessments.

What Is An Equalization Formula?

In the year that your municipality has done a revaluation, every Property is assessed at 100% of market value. In normal economic conditions, for each succeeding year after a revaluation, that percentile drops. The State Director of the Division of Taxation studies all sales in your municipality and determines an assessment ratio to be used in your county. The total taxable wealth of the municipality is multiplied by a factor to bring it up to 100%. In this way all municipalities in the county will reflect 100% evaluation for county tax purposes.

Why Does My Tax Bill Have Two Different Years On It?

Example: The current year is 2008.

Your tax bill will arrive in June, 2008. It will show taxes due in the current year as third and fourth quarter taxes. That is what you still owe for the 2008 tax year. The assessed value, the tax rate and the total tax amount, will all show amounts for the year 2008. The first and second quarter taxes are shown as preliminary taxes due in the year 2009.

What Is Net Tax?

Net tax is all taxes owed in the current year, minus deductions.

What Deductions Or Exemptions Are Allowed?

Property tax deductions and/or exemptions are allowed for certain eligible citizens by State law. Some of these are: disabled citizens or their surviving spouses, permanently and totally disabled veterans or their surviving spouses, senior citizens, veterans or their surviving spouses, farmland and improvements and certain conversions to a multiple use building. If you think you might qualify for any of these deductions or exemptions, see your local assessor or collector. They will give you the proper form to fill out and file.

What Other Information Is On My Tax Bill?

The assessed value of your property will be shown. It will sometimes show as the land value, plus the improvement value (structures), adding up to the total value. On some bills the lot size or lot dimensions will be shown. Property classifications or qualifications are often shown. These are coded and used by all municipalities in the state.

Property codes are:

1 - vacant land
2 - residential
3A - farm-regular
3B - farm-qualified for farmland assessment
4A - commercial
4B - industrial
4C - apartment
15A - public school property
15B - other school property
15C - public property
15D - church and charitable property
15E - cemeteries and graveyard
15F - other exempt property

Bank Number ... Every bank in New Jersey has a numerical code. The code for the New Jersey bank that holds your mortgage will be shown in this block on your tax bill if the bank makes your tax payments.

Tax Block and Lot ... Your property identification in the municipal tax maps and tax books. This is the official property identification.

Property Address ... This is the correct address of the assessed property.

Tax Rate ... Your tax bill received in the year 2008 will show the tax rate for the year 2008. That rate includes the municipal tax rate, the school tax rate, and the county tax rate. The tax rate is applied to each $100 of assessed value. You can figure out your total taxes for the year 2008 by multiplying the tax rate times your assessed value and then moving the decimal point in the answer to reflect hundreds.

Example: Your property is assessed at $150,000 and the tax rate is 8.29. Your taxes would be $12,435 in 2008.

These items may appear on your Tax Bill.

Tax Account Number ... This is your property's numerical identification in your municipality.

Fire District ... Some municipalities are divided into fire districts which are supported by taxes. Each fire district has a number. This number is on your tax bill.

What Are Your Local Property Taxes Paying For?

If your town pays taxes to support fire districts, this will be part of the budget. Local property taxes support the needs of your municipality, your school system, and your county. The monies raised through local property taxes represent the remainder of all budget expenses not covered by revenues.

What Are Municipal Revenues In The Budget?

Some examples of municipal revenues are fees collected, permit fees, fines, State Revenue Sharing, and grants.

How Does Your Municipality Formulate A Budget?

Your municipal budget considers all municipal financial needs. These are expenditures or operating expenses. Then all sources of revenue or income are factored in. The difference between expenses and revenue is your municipal budget portion needed to be raised by property taxes. Example: Your local budget totals of $100,000 in expenses and receives $50,000 in revenue. Therefore, the balance of $50,000 will need to be raised by local property taxes.

How Is The Tax Rate Derived For The Municipal Portion?

The municipal portion of the tax rate is what expenses are not covered by revenues. That amount is divided by the total wealth (total assessed value) of your municipality. The result is the municipal tax rate. Each tax point in a budget is worth 1 cent. On the budget .075 means 75 cents per $100 of assessed value. On your tax bill it will show as .75.

How Is Your School Tax Rate Determined?

The local school budget is prepared by the local school board. It is then voted on by the residents of your municipality.

Like the municipal budget, expenditures (instruction, administration, maintenance, activities, etc.) and revenues (State aid, tuition, and federal aid) are tabulated. The expenses not covered by revenues must be raised through local property taxes.

How Is Your County Tax Rate Determined?

The County Board of Taxation determines each municipal share of the county budget. The equalization formula is used to bring all municipalities in the county up to 100% of true value in allocating their share of the county budget.

How Do These Rates Show On Your Tax Bill?

In some municipalities the tax rate for municipal, school, and county purposes will all be shown and then totaled.

Example: 2008

Municipal tax rate 1.515
School tax rate 5.635
County tax rate 1.140

Total 8.29

If your municipal tax bill only shows one rate, that rate is still a total of the municipal, school and county rate.