Property Tax Reassessment 101: Everything New Jersey Homeowners Need to Know

New Jersey Property Tax Reassessments: A Detailed Guide for Homeowners

According to the latest data from the Tax Foundation, the average property tax bill in New Jersey is $9,279 per year. This is the highest average property tax bill in the nation. In 2022, New Jersey homeowners paid an average of 2.3% of their household income in property taxes. This ranks 10th in the nation.. So when homeowners receive notice that their municipal government is conducting a town-wide reassessment, it often causes anxiety and confusion around how their taxes could be impacted.

Below we provide answers to frequently asked questions about the property tax reassessment process in New Jersey. We’ll cover topics like how new assessments are calculated, what happens to your tax bill after a reassessment, your rights to appeal, key deadlines, and how the process varies across the state’s 21 counties.

What is a Tax Reassessment?

A reassessment is when a town completes a review of all home values and resets the assessed value of each property to current market rates. The goal is to ensure assessments reflect the fair relative value of each home compared to others in town.

Over time, some homes appreciate faster than others. A reassessment aims to equalize those property values so that no homeowners are paying disproportionately high or low taxes. Reassessments also account for upgrades, additions, or deterioration of homes.

Without periodic reassessments, long-time homeowners would unfairly pay lower taxes compared to recent buyers in the same town. Regular revaluations ensure equitability based on current values.

Why are Reassessments Needed?

The primary reason a town conducts a reassessment is to maintain fairness in property tax distribution. As mentioned, home values change at different rates over time, and a reassessment synchronizes those values. From a revenue perspective, reassessments help towns collect the correct amount of overall property tax revenue based on current real estate prices.

In addition, regular reassessments protect against dramatic swings in taxes for individual homeowners when infrequent revaluations allow divergences in home prices to accumulate over an extended period. More frequent reassessments of 3-5 years help smooth out major tax shifts.

Finally, periodic reassessments ensure that the contribution of each home’s property taxes going towards county and school budgets is equitable, since those budgets depend on aggregated assessed values across the town.

How Often are Reassessments Conducted?

There is no universal reassessment schedule mandated for New Jersey municipalities. Each town sets its own timeline, ranging from annual reviews to over 15 years between revaluations.

Typically suburban communities conduct reassessments every 10-15 years. Urban areas with rapidly changing real estate markets tend to reassess more frequently, such as every 2-5 years. Shore towns may also reassess every few years because home values there can fluctuate rapidly.

Homeowners should check with their local tax assessor or town clerk’s office to learn when the last revaluation occurred, and the planned timing for the next reassessment.

What is the Reassessment Process?

Reassessments are carried out by private appraisal firms hired by the municipality. These firms employ licensed professional appraisers who are trained in valuing residential real estate.

Appraisers will visit each home exterior to evaluate attributes like size, age, condition, quality, renovations, and amenities. Interior inspections are not part of a standard reassessment, but assessors can request access to validate renovations or additions.

Appraisers incorporate this data along with recent neighborhood home sales to estimate current market value. Complex statistical modeling may be used to calibrate valuations across the town. All appraisal data is entered into the town’s property assessment software database.

Once the reassessment is complete, homeowners are mailed a notice with their home’s new assessed value. You have the right to appeal the assessment if you believe there are inaccuracies.

How is my Home Value Determined?

Assessors rely on multiple data points to estimate your home’s market value:

- Exterior inspection - Assessors evaluate size, age, condition, renovations, additions, amenities

- Interior inspection (if granted) - Allows validation of upgrades and additions

- Property record card - Details on home attributes, last recorded updates

- Recent neighborhood sales - Compare your home versus similar sold comps

- Market data and trends - Area home values, appreciation rates, foreclosures

- Statistical modeling - Complex algorithms for calibration across towns

Assessors combine this information using their professional appraisal expertise to derive your home’s assessed value. The goal is to be as accurate as possible in determining fair market value if your home were to sell.

Will my Taxes Change after Reassessment?

A reassessment does not directly alter your property tax bill. It simply resets your home’s assessed value to reflect current market prices. After reassessing each home, the town will then adjust the tax rate up or down for the coming year in order to collect the same total revenue as the prior year, excluding exceptions for new spending or programs.

For example, if assessments increased 10% across the board during revaluation, the tax rate would be lowered 10% by the town so that revenue remains neutral. Some homes may pay more if values grew disproportionately, while others may see a decrease. But in aggregate, a revenue-neutral tax rate is recalibrated after each reassessment.

The main goal of a reassessment is equitability based on current values, not increased revenue. That said, rapidly rising property values can lead to increased taxes for many homeowners over multiple reassessment cycles.

How do I Appeal my Assessment?

If you believe your home’s assessed value is inaccurate, you have the right to appeal to potentially have it lowered. There are two levels of appeal:

Informal Review: You can request an informal review with the town assessor’s office. Present evidence like comparable home sales or proof of overstated attributes. Often issues can be resolved at this stage.

Formal Appeal: If unsatisfied, you can file a formal appeal with the County Tax Board. You must provide rationale and documentation supporting a lowered value. The county board will make a final judgment on an appropriate assessment.

Most appeals focus on whether the assessor erred in determining the home’s market value, rather than disputing the fairness of taxes. The latter would require changing the way NJ municipalities fund their budgets.

What are the Appeal Deadlines?

For a regular reassessment, you must file an appeal by May 1st of the current tax year, following receipt of your notice of assessment. If the town is undergoing a complete revaluation, this deadline may extend to June 1st. Check with the county tax board for official dates.

Some counties have later deadlines. For example, Cape May is June 1st, Cumberland August 1st, and Salem September 1st. Again, confirm with the county board when filing an appeal.

How Much can Assessment Appeals Lower my Taxes?

There are no limits or guidelines on how much a successful assessment appeal can lower your taxes. If the county tax board is convinced the assessor set your home value well above true market rates, they may order a substantial reduction.

However, assessment appeals rarely result in a dramatic tax decrease. Declines of 5-15% are more typical. Larger reductions are possible if you can prove major errors in how the assessor valued your home versus similar comps. But the burden of proof falls on the homeowner to validate the assessed value is wrong.

Can I Still Appeal if Undergoing a Town-wide Revaluation?

Yes, assessment appeals can be filed even if your town is undergoing a full revaluation, which reappraises all properties rather than phased-in over multiple years. The same process applies where the county tax board reviews whether your individual assessment is fair and accurate.

The only difference is that the appeal deadline may extend from May 1st to June 1st when the town is revalued all at once. All other rules and procedures for assessment appeals remain the same during a town-wide revaluation.

Do I Need a Professional Appraisal for My Appeal?

You do not require a third-party appraisal to appeal your assessment, but it can add credibility if done properly. Some homeowners will hire an independent appraiser prior to filing their appeal to validate that the town assessed their home above true market value.

If seeking a private appraisal, use a licensed professional appraiser, not just a real estate agent’s perspective. Also, make sure the appraiser follows the same valuation methodology used by the town. The county tax board gives greatest weight to third-party appraisals that use similar standards.

When considering the cost, recognize that appraisals can run $400-$700 for a single-family home. Weigh whether that upfront cost makes sense based on your potential tax savings from a successful appeal.

Can I Appeal my Assessment Every Year?

In most towns that only reassess periodically, you can only appeal your assessment during the year a revaluation was conducted, or one year prior when your initial notice is received.

However, some towns now conduct annual reassessments rather than every 10-15 years. In these municipalities, you could appeal the assessment of your home each year. But successive appeals require you to prove the value should keep declining compared to the prior year.

How are Assessment Appeals Decided?

County tax boards rely on various factors when judging assessment appeals:

- Appraisal methodology - Was it consistent with industry standards?

- Comparable properties - Does your home align with values of similar sold homes?

- Documentation - Did you provide evidence to support claims of over-assessment?

- Property characteristics - Do the appraisers’ records accurately reflect your home?

- Market conditions - Did the assessor incorporate current area market trends?

Ultimately, the county board judges whether the town’s assessed value falls reasonably within an acceptable range of your home’s true market value. Minor disagreements typically won’t result in assessment reductions. But proven errors can lead to lowered appraisals.

Do Reassessments Increase Tax Revenue for Towns?

A reassessment itself does not raise money for the municipality. The goal is to reset home values to properly reflect the distribution of property taxes, not to directly increase overall revenue.

Following a reassessment, the town will adjust its tax rate based on aggregate assessed values so that the total tax levy remains consistent with prior years, outside of normal increases in the municipal budget.

However, rapidly appreciating real estate markets can lead to higher taxes over multiple reassessment cycles. Assume a hypothetical town has a $20 million annual tax levy. If reassessment leads to a 10% aggregate increase in home values, the tax rate would then be lowered 10% to still collect $20 million. But if values rise 20% at the next reassessment, taxes collected will increase proportionally.

So over successive rising markets, reassessments can contribute to higher property tax bills, but they don’t directly cause an increase in and of themselves. The main priority is maintaining fair distribution based on current values.

Do all Towns in a County Reassess on the Same Schedule?

Not necessarily. While the county requires each municipality to complete reassessments periodically, they don’t mandate aligned timing across the towns. Some counties may request towns reassess concurrently for easier administration. But generally each town develops its own reassessment schedule.

Within a given county, some towns could be undergoing revaluations while others are in between scheduled assessments. It depends on when each town last reassessed, and their chosen frequency for repeating the process. This patchwork approach can create imbalances at times in relative home values across town borders.

How do I Learn More About the Reassessment Process?

If you have additional questions about upcoming reassessments in your town, there are several ways to learn more:

- Contact your municipal tax assessor’s office

- Review information on your county’s website and tax board site

- Search for notices and schedules on your town website

- Attend municipal meetings open to the public

- Consult online resources like the sites highlighted in this article

The reassessment process in New Jersey can seem complex, but being an informed homeowner helps ensure you understand how your property taxes are impacted. Revaluations aim for fairness based on current values, even if they sometimes contribute to increased taxes over time in hot markets. With the right information and willingness to appeal inaccurate assessments, homeowners can navigate the process smoothly.