2010 Reassessment

Table of Contents

 Why a Reassessment?
What is the basis for my assessment?
 Will my taxes go down because of the reassessment?
When will the reassessment be completed?
 Will there be someone inspecting my property?
Will a notification be sent for the new assessments?
 Can I still appeal my assessment in 2010 after the reassessment has been completed?
 Summary

Why a Reassessment?

Jefferson Township performed its last Revaluation in 2006. The assessed value of every property was set at 100% market value as of October 1, 2005. This is the standard that all assessments must meet after a revaluation in the State of NJ  based on N.J.S.A. 54:4-23 et seq. The real estate market had seen a dramatic increase in value until the middle of 2007. Since that point in time there has been a dramatic decrease. Studies of sales records in 2009 indicate that current assessments are on average 10-15% higher than market value as of October 1, 2009. 

Reducing the assessments will accomplish the following:

* Mitigate the potential loss of up to $9.2M in taxes due to appeals. Without a reassessment, every property owner would have the possibility to see a successful reduction of their assessments of 15%. This reduction would have to be collected the following year in an increase of the tax rate plus the cost of emergency bonding, surplus funding and administrative court costs in appeal hearings. No actual reduction would be realized by the property owner but an increase because of additional administrative fees. 
* Refresh the revaluation that was completed for 2006. A revaluation lasts between 10 - 15 years with the one performed in 2006 costing $675,000. The reassessment will extend the life of the revaluation by four years. This is an average annual cost savings of $180,000.
* Nine municipalities in Morris County were granted permission to perform a reassessment. Jefferson Township is the only one not required by the Tax Board to hire an outside firm. This has saved Jefferson over $300,000. Reassessment contract proposal.

An application for reassessment was submitted to the Morris County Board of Taxation in August. Please review this document for the full analysis of sales and justification for reassessment.

What is the basis for my assessment?

In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove an assessment does not fairly represent one of the two standards:

·         The other standard is the "common level" or common level range established in your municipality. To explain the common level range you must consider what happens following a revaluation. or reassessment. Once a revaluation or reassessment is completed, external factors such as inflation, appreciation, and depreciation may cause values to increase or decrease at varying rates.

Other factors such as physical deterioration may contribute to changes in property values. Obviously, if assessments are not adjusted annually, a deviation from 100% of true market value will occur.

The State Division of Taxation annually conducts a fiscal year sales survey, investigating most property transfers that occur in your community, with your local assessor assisting. Every sale is compared individually to every assessment to determine an average level of assessment in a municipality. An average ratio is developed from a sampling of property sales to represent the assessment level in your community. In any year, except the year a revaluation or reassessment is implemented, the common level of assessment is the average ratio of the district in which your property is situated and is used by the Tax Board to determine the fairness of your assessment. The sales ratios are reviewed inter and intra for each municipality.

Will my taxes go down because of the reassessment?

On average, your taxes will not change because of the reassessment. Your property tax bill consists of two parts, your assessment and the tax rate. The tax rate is determined by how much is budgeted for the schools, municipal and county government. A reassessment only deals with half the equation, the property assessment. Assessments are used to apportion the budgetary requirements of the municipality by charging every owner the same percentage of their market value to raise the total amount needed to meet the budget. Please refer to the following article The Affects of the Real Estate Market on Taxes  for a more in depth explanation.

When will the reassessment be completed?

Assessments for 2010 must be certified by the county tax board on or before January 10th. Annual deadline for submission of tax lists by municipalities is the last week of December. The new assessed values for 2010 are expected to be available for review by the third week of December. An announcement will be posted on the Township web-site.

Will there be someone inspecting my property?

No, because in 2005 every property was inspected on the exterior and 95% of all properties were inspected on the interior. Since then any property that had a physical change affecting market value was reinspected. Furthermore, a statistical analysis of all sales over the past 4 years shows the standard deviation of individual sales ratio compared to average sales ratio is less than 10%. This statistic is a test of how accurate the collected data is in developing assessment models. Because the deviation is low the accuracy is very high.

Will a notification be sent for the new assessment?

Assessment notification postcards are sent by February 1st of every tax year. The postcard will reflect the 2010 assessment and the taxes billed in 2009. The 2010 assessments will also be available on the Township web-site expected around the second week of December.

Can I still appeal my assessment in 2010 after the reassessment has been completed?

Yes, a homeowner has the right to file an appeal on their property assessment every year. The appeal deadline in normally April 1st of the tax year. With a reassessment, the appeal deadline is extended to May 1st. All forms and information can be obtained from the Morris County Board of Taxation (973-285-6707) Please remember you do not appeal taxes. You appeal the assessment. To have a successful appeal the petitioner must provide credible evidence that the market value of their home is less than the assessed value as of October 1 of the pre-tax year. For further information regarding the appeal process, please review Tax Appeal Information on our web-site.

In Summary

The reassessment is being performed for the following reasons.

1. On average, all assessments in Jefferson are over 100% market value as of October 1, 2009.

2. Reducing the assessments will help mitigate the risk of losing up to $9M in tax appeals. 

3. Taxes will not be reduced because everyone's assessment is dropping in the same manner.

4. A property owner retains the right to appeal their assessment between January 1st and May 1st. 
   You must prove market value of your property as of October 1, 2009.

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