Commercial property owners in New Jersey face significant tax burdens. The tax appeal process offers a potential solution, allowing owners to challenge their property’s assessment and possibly reduce their tax bills. In a high-tax state like New Jersey, understanding this process can significantly impact a business’s bottom line.
Why appeal property taxes?
New Jersey sets property taxes based on the property’s value. These taxes fund local services such as roads, schools and law enforcement.
However, the assessments may be inaccurate or outdated. Owners might want to appeal if:
- Property value has gone down
- The tax value is higher than nearby similar properties
- There are mistakes in the property description
These issues can lead to high tax bills. Therefore, a successful appeal could result in substantial tax savings that improve a business’s financial position.
Steps to appeal
A property tax appeal challenges the assessed value, not the tax rate itself. To win theirs, property owners need to understand the process. In New Jersey, it involves several key steps:
- Review the assessment notice
- Gather supporting evidence
- File the appeal by the deadline
- Attend a hearing at the County Board of Taxation
Each step requires careful attention. Gathering convincing evidence is crucial. This can include recent professional appraisals, photos showing property condition issues, sales data for similar properties, and income and expense statements. Engaging a commercial real estate attorney may also enhance the appeal’s prospects, often justifying the additional expense.
Legal points to consider
New Jersey allows annual tax appeals, giving owners regular opportunities to address assessment issues. However, an appeal could potentially increase an assessment.
New Jersey uses a test called “Chapter 123” to decide if taxes are fair. This rule says taxes are fair if they’re within 15% of the property’s actual value. Knowing this rule helps owners decide if they should appeal.
Tax appeals give commercial property owners a chance to ensure fair taxation. They take work to prepare, but they can pay off. By knowing how to appeal and making a strong case, owners can effectively manage their property tax liabilities, making them a valuable strategy for savvy business owners.
