Originally posted by: Aharami
I bought my first house in July '08 for $280K. Assessed value for 2008 was $316K. I got a letter in the mail recently saying that my property has been assessed at $260.5K and I have till May 1st to appeal this assessment. I understand the housing market decline and thus the lower value, but Im not really sure if I should be appealing this assessment. Theoretically, lower property value should lower my property taxes, but knowing this state, they'll jack up the tax rate to keep the dollar amount the same. I'm not looking to sell anytime soon but I have been thinking of refinancing and a lower property value will get me closer to that 20% LTV (put 10% down upon closing)
Under what circumstances would someone appeal their property assessment?
A few things:
1. When you appeal your assessment, the municipality is allowed to be a certain percentage off. I believe it is a fairly high % (15 or possibly higher). You should consult a lawyer who specializes in tax appeals to get actual details on it.
2. You're kind of right that the municipality is likely to "jack up" the tax rate. Their goal is to get X amount of dollars every year. Your assessed value is really just giving them a way to measure what portion of that money you owe. If everybody's assessed value were cut in half, then its likely that everyone's taxes would remain the same (because the tax rate would double). It may sound "wrong", but this is how your town gets most of its money, and its not a NJ specific thing (though the generally high tax rates ARE).
3. Its really not clear to me if you're trying to appeal the assessment for being too high or too low, although I've only ever heard of appealing b/c of the amount being too high. Just remember that if you want to refinance, you'll probably have to pay for a new appraisal to be done by a company of the mortgage lender's choosing. Your municipal assessment isn't necessarily going to have a direct impact on that assessment (but sales of similar homes nearby will).
People generally appeal when their home is assessed substantially higher than it should be. For instance, if you purchase a home for 400,000 and a year later the town is claiming a value of 700,000 or more. If the rate stays the same, this could leave you with almost double the tax bill you had previously.
I'd say, as I said earlier, that you should contact a lawyer who specializes in tax appeals. You could likely get at least a 15 minute phone consult to determine what the pros and cons of an appeal are and whether it would even make sense for you.
Don't think this needs to be said, but this is not legal advice.
Also, in case you want more general info:
http://www.state.nj.us/treasur...n/pdf/lpt/ptappeal.pdf
