New Jersey Property Tax Appeals
1.How does Hoboken determine my property taxes?
Hoboken calculates your property taxes by multiplying your property’s assessed value by the property tax rate for that given year.
2010 Assessed Value = $200,000
2010 Property Tax Rate = 4.745%
2010 Property Tax Bill = $9,490
2.How do I find my assessed value and property tax rate?
You can find your assessed value by going to www.njactb.org and doing a record search by your property address.
You can find your property tax rate by looking at the list on the following website. http://www.hudsoncountytax.com/html/RatesRatios.aspx.
3.Why is my assessed value different from the price I bought my home for?
All municipalities in New Jersey, including Hoboken, make their assessment on a percentage of the property’s assumed value. For Hoboken, that percentage for 2010 is 27.16%. This information is also available at http://www.hudsoncountytax.com/html/RatesRatios.aspx.
For the example above, the tax assessor’s opinion of your property’s value can be derived by dividing the assessed value by the ratio.
2010 Assessed Value / 2010 Ratio = 2010 Assumed Value
$200,000 / .2716 = $736,377.03
This means that the Hoboken Tax Assessor thinks your property is worth $736,377.03 in 2010.
4.Wait a minute! What if the value the assessor thinks my property is worth is higher than what I think my property is worth today?
Given the economic downturn, thousands of properties in Hoboken are improperly assessed and as a result property owner’s are paying higher property taxes than they should be. It is your right to challenge the assessor’s valuation of your property with an appeal.
5. Ithink I am paying too much in property taxes. How can I appeal my property tax bill?
Property taxes are the result of the local budget process and may not be appealed but the property’s assessment may be. Your tax bill is a function of your assessment times the tax rate. If your assessment is reduced, your tax bill will be reduced. A taxpayer considering an appeal of his property tax assessment must prove that the assessed value is unreasonable compared to a market value standard.
6.You say I can appeal if the assessed value is “unreasonable". What qualifies as an “unreasonable" assessment.
State law allows each municipality a 15% margin of error in either direction from the municipal ratio. For 2010 the Hoboken range was 23.086% to 31.234%.
In order for your property to qualify for a property tax reduction you must find what we call the “Sweet Spot Market Value." This is the maximum market value which will still qualify your property for a reduction in your property tax assessment. Any appraisal that shows your property is valued at this level or less, will qualify for an appeal.
2010 Assessed Value = $200,000
High End of Range = 31.234%
Sweet Spot Market Value = 2010 Assessed Value / High End of Range
Sweet Spot Market Value = $640,204.87 ($200,000 / .31234)
What the “Sweet Spot Market Value" calculation is saying is if your property appraises for $640,204.87 or less, you will qualify for a reduction of assessed value.
7.How do I investigate what my property is really worth on the market, to see if it is less than the Sweet Spot Market Value?
A great place to start is a real estate website called www.zillow.com which provides current and historical estimates of property market values.
For purposes of this example, assume the Zillow estimate for your property comes in at $538,000.
8.Now that I have an estimate of my property’s market value from www.zillow.com, how do I find out if I qualify for lower taxes.
With a market value of $538,000, you are well below the Sweet Spot Value of $640,204.87, so you can proceed with an appeal.
If you win your appeal, your property will receive a new tax assessment. The new tax assessment will be calculated by multiplying the updated market value by Hoboken’s municipal ratio.
Updated Market Value x Municipal Ratio = New Assessment
For example $538,000 x .2716 = $146,120.08
9.Once I have estimated my new assessment, how do I calculate my tax savings.
To find your tax savings, compare your tax bill under the old assessment with your tax bill under the new assessment.
Per the example, the old tax bill (in Question 1 above) was $9,490 based on the tax assessor’s $200,000 assessment.
Adjusted Estimate x Tax Rate = Updated Taxes
$146,120.08 x 4.475% = $6,933.40
Old Tax Bill – New Tax Bill = Tax Savings
$9,490 - $6,933.40 = $2,556.60