Real Estate

Why Every Homeowner Needs a Property Tax Doctor

Because every homeowner who protests their assessments, with an understanding of how the property tax assessment system works, often receives tax savings of $ 500 to $ 1,000, if not more, annually on their property tax bill. the property. Simply put, the property tax bill is calculated by multiplying the homeowner’s assessment by the local property tax rate and subtracting any tax deductions for which the homeowner is eligible.

The property tax doctor can show you how to lower your assessment and therefore lower your property tax bill! The property tax doctor is a former tax assessor who knows firsthand how difficult it is for the average person to penetrate the bureaucratic jungle of the tax assessor made up of arcane terms and practices. No government document does this for the homeowner.

Like going to a doctor’s office, the first thing you need to do is gather the information you need to do the paperwork. The primary sources for that information are the owner’s property registration card obtained from the appraiser’s office and comparable home sales. Most homeowners armed with one or both of these pieces of information narrow down their assessment most of the time without going beyond the local tax assessor’s office.

Just as you ask your doctor informed questions to get some pain relief, you should also ask your tax advisor (with the help of the property tax doctor) some informed questions to get property tax relief. The best advice your property tax doctor can offer is to go to your local tax assessor’s office and check your property registration card for any errors of fact! Administrative errors and simple errors occur during the valuation process. Here is a partial list of common mistakes to check for.

1. The dimensions of your house or the dimensions of your land are wrong.

2. Do not record depreciation in adverse conditions on the site or do not show depreciation or minimal depreciation for an older home.

3. The dimensions of your terrain are incorrect.

4. Review all the calculations, whether or not you understand where the factors come from.

5. Not taking note of off-site influences that depreciate — a factory or landfill that produces toxic fumes.

6. The quality of upgrades is wrong: You have a stone, not a macadam path, or: You have the low-priced hot tub, not the big-name, expensive hot tub.

7 Completed areas are listed incorrectly — the basement is showing as finished and it is not.

8. The age of the house is incorrectly indicated or the number of floors is incorrect.

My father would not allow the local tax advisor, who was also his best friend, to walk past the kitchen table on our farm. My father feared that he would see certain improvements inside the house and increase our evaluation. My father mistakenly believed that the improvements he had made inside the farmhouse, such as a new bathroom sink, plaster repairs, wallpaper, new ceilings, new lamps, would increase our appraised value. It also postponed external repairs until after the next revaluation for fear of further evaluation. Surprisingly, he was wrong. Exterior repairs such as roof replacement, masonry repair, porch repair, steps, stairs, etc. do not increase the homeowner’s appraisal. Neither does the replacement of garage doors, sheds, sidewalks, etc.

Often times, establishing the proper combined property value for your home and the land below it is the key to your property tax appeal. To win your appeal, your homeowner must set your property’s value at a lower level than the appraiser used.

To establish the market value, the homeowner can go to the website http://www.zillow.com to obtain a rough estimate of the value of their home. The site uses some basic variables such as square footage, number of bathrooms, acreage, and number of bedrooms to calculate the market value of the home based on a formula that is based on other home sales in the neighborhood. Where zillow has the sales data, this is a good first step in seeing if your home is priced too high.

In the years after the revaluation year, the homeowner must find out what the appraisal to sales relationship is for their New Jersey tax district. This ratio is announced each year and is available from your local tax assessor’s office. It represents the average in which the appraised value of all the properties that were sold in the last year was compared with their sale value in the municipality. Because it is important? You can provide a key factor to show that you have received an unequal evaluation and have the right to file a discrimination challenge in the evaluation of your property for a tax reduction.

An uneven appraisal is one that is done at a higher ratio of market value than the average of the other parcels on the roll. About a year after a revaluation, home inflation often makes the appraisal your tax advisor placed on your home appear low compared to the sale prices of comparable sold homes in your neighborhood. But beware!

A low sales appraisal rate in a municipality can mislead some taxpayers into thinking that they are being appraised below market value and therefore getting a break. However, if all assessments are set below market value, then the tax rate must be increased to collect the necessary amount of tax revenue. The same amount of taxes is collected, but taxpayers are misled into believing they have obtained relief and do not seek the wrong determinations.

Now, don’t forget that the sales appraisal rate (or common-level rate) is a key factor in obtaining a property tax relief. Let me explain. An important test of the fairness of your appraisal is not just its relationship to market value. It is also whether or not it is fair in relation to evaluations of other properties in your city. For example, if you have a house with a market value of $ 800,000, but it is priced at $ 600,000, you may think it is coming cheap. However, if your neighbor’s house, which is comparable to yours, is valued at just $ 200,000, you are paying three times more property taxes than you should!

When your property is under appeal, the County Tax Board can adjust the value of your home to the common level. The taxpayer must know the average proportion in the municipality where the property that is the object of the appeal is located before filing a tax appeal. Remember that the ratio changes annually on October 1, for use in the subsequent fiscal year. Also, remember that this common level adjustment is not used in the revaluation or revaluation year when all properties have been brought to 100% of market value.

Once the County Tax Board determines the true market value of a property, it must automatically compare that true market value to its appraised value. If the ratio of the evaluation to the actual value exceeds the average ratio by 15%, the evaluation is automatically reduced to the common level. The owner gets his tax credit on the property. But beware! If the relationship between the assessment and the actual value falls below the common level, the County Tax Board is required to increase the assessment to the common level. The homeowner would then get an increase in his property tax. If the evaluation is within the common level range, no adjustment is made.

Each year, on October 1 of the year before the tax, the appraiser establishes a value for each of the properties in the municipality for the following tax year. The annual appraisal value is considered intent during the public inspection period of the new tax list from January 1 to 10. The purpose of the inspection period is to allow the taxpayer to determine what appraisals have been made against him and to consult informally with the appraiser about the correction of the appraisals.

At this point, your approach may be informal and will not require a formal written appeal. Taxpayers have the opportunity only once a year to file a formal property tax appeal. Obtain your tax form for property tax appeal purposes from the County Tax Board website. Generally, it must be received by the County Tax Board on or before April 1 of the tax year. If the taxpayer does not meet the deadline to file a formal appeal, the taxpayer must wait until the following year to challenge any tax relief.

The Property Tax Doctor can help the average homeowner get their rightful tax break. Under the common level adjustment, described above, New Jersey’s statutory standard for an acceptable margin of error in assessing property tax in its calculation is 15%. In New Jersey, where the average homeowner in 2006 paid about $ 5,000 per year in property taxes that equates to an acceptable $ 750 error on the property tax bill. If we administered our Federal Tax bill with that 15% margin of error, we would have a taxpayer rebellion.

Gerald Dowgin © 2006

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