Revaluation or Malassessment in New Jersey

What is it? – A revaluation is an activity carried out by the local tax assessor in order for the municipality to evaluate all real estate within its limits according to the current market value. The difference between a reappraisal and a reappraisal is that the appraiser hires a reappraisal company to do the work if it’s called a reappraisal versus doing the work in-house with the staff at the appraisal’s office in the case of a reappraisal.

What’s its purpose? – The sole constitutional purpose of a revaluation is to distribute the property tax burden equitably among all property owners within a municipality.

What if it’s not done? – In general, delays in updating assessments to reflect changing physical and economic conditions lead to a poor assessment. Properties that previously had a similar value became different. Owners of rising property values ​​were charged with paying a lesser portion of the tax burden than would otherwise be the case and after reassessment “suffer” much higher property tax payments. Other property owners “benefit” from reduced taxes because the value of their property has decreased or increased only slightly; these taxpayers have been paying a higher tax than they should have.

What causes the discomfort? – Every property in the same municipality with the same market value at any given time must pay the same amount in property taxes. Incorrect appraisals or inequitable appraisals result from the following situations that cause appraisal inconsistency:

or changes in the characteristics of the neighborhood;

or changes made to individual properties;

o fluctuation in the economy (inflation, recession);

o changes in style and customs (desirability of architecture, size of the house);

or zoning changes that may enhance or negatively affect value.

What is wrong here? – Appraisers are asked to find “the price” at which a willing buyer and a willing seller would agree to transfer a property on October 1st. Well, common sense tells you that there is a whole range of prices at which a willing buyer and a willing seller could make a sale. Therefore, the evaluations are only predictions, and even the best predictions err. The need for a reassessment or reassessment, therefore, grows with the passage of time that erodes the old information on which the original assessments were made. Throughout the state of New Jersey, these assessment predictions or estimates form the tax base on which 2/5 of all our state and local taxes are collected. It is on this set of predictions that New Jersey local governments raised $19.6 billion in 2005.

Is there a better way? – Yeah, first we must realize that we have an indefensible tax structure that places too much weight on a property tax base that is, at best, just a set of predictions. Secondwe must provide for accurate periodic evaluations by strengthening and reinforcing the evaluation function with a solid investment in computers, evaluation database management and evaluation educational resources for evaluators.