What is a Revaluation?
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Towns periodically undertake a revaluation to reflect current market conditions. Neighborhoods and individual homes may change, but assessments are mostly static. The one major exception is the case of an improvement or modification to your dwelling. Since market conditions change, and assessments rarely change over time, the relationship between assessments and market values becomes more distant and must be brought into line.
The purpose of the revaluation is to redistribute the existing tax burden more fairly based on current market value: If market value of your home is $300,000, it should be assessed for $300,000. If the market value of your home is $500,000, it should be assessed for $500,000. This principle is established by the New Jersey Constitution, and spelled out specifically in statutory law.
A common misconception is that the town is using the revaluation to raise property taxes. This is not the case. Property taxes are determined by the municipal, county and local school district budgets. If these budgets go up from one year to the next, and state aid is static, property taxes will rise, whether or not the town undertakes a reval.
Because the ratable base (total assessed value of all properties in town) goes up after a revaluation, the tax rate is adjusted downward.
For example:
Pre-reval Assessed Value x. Tax Rate = Pre-reval Taxes $250,000 x $4.00 = $10,000
Post-reval Assessed Value x. Tax Rate = Post-reval Taxes $500,000 x $2.00 = $10,000
The Division of Taxation mandates that we attempt to inspect the interior of every dwelling and commercial/industrial/apartment building in town. Inspecting the interior of your dwelling helps to make a more accurate valuation of your property.
I have not made any improvements to my property since the last reval. Why does my house have to be inspected?
Unless an interior inspection is made, the current condition of the dwelling can not be determined. If the interior of your dwelling is unchanged over the years, you should encourage the inspector to see the interior condition.
The person inspecting your dwelling is a trained full-time property inspector. He or she is not a tax assessor or an appraiser. He or she will not be formulating an appraisal of your house. Our inspectors are trained to measure the exterior of the dwelling and to inspect both the exterior and interior.
Inspectors will have two forms of identification: a company-issued badge with photograph, and also a town-issued letter of introduction. Please make sure to check their identification before allowing them into your dwelling.
They are not looking at your furnishings, clothing, or pets. They are counting rooms and baths, noting the type of heating system, as well as amenities such as; fireplaces, decks, patios, etc. They also look at the condition of the dwelling, as well as any problem you bring to their attention.
You are not required to allow an inspector to enter your home. However, if you decide not to allow an inspection, you can be sure that your valuation will be substantially higher than it would have been had you allowed the inspection. In fact, after we mail out our valuation letters at the end of a reval, often the first people that call us for an appointment are those who did not allow an inspection. Before we can discuss the new valuation with them, they will be required to allow us an interior inspection of the dwelling.
Our inspectors will make three attempts to inspect, usually arriving at different times, on three different days. If, after the first or second attempt, they are unable to gain entrance, they will leave a card at the door with an easy to use website and telephone number you may call to arrange an appointment.
Licensed appraisers review the inspection data and dwelling measurements. All recent property sales in each neighborhood are analyzed, giving most weight to the sales which occur closest to October 1st of the year the reval is conducted. Those sales are used to formulate all of the valuations in that specific neighborhood.
Once all of the values have been determined by our firm, the Tax Assessor will conduct a review, and either approve them, or modify some. After the review and modification is completed, Realty Appraisal Co. will mail a notification letter to each property owner in town.
You should read this letter very carefully. In addition to the new valuation of your property, it contains instructions on how you may proceed. If your new valuation seems to coincide with your own opinion of your home’s value, or with recent sales in your vicinity, you don’t need to take any action.If however, you would like to review your appraisal, you should use the website provided or call the phone number provided in the letter to schedule an appointment to discuss your new valuation.
Informal reviews are held in a convenient location in your town, often at the municipal building. In order to accommodate homeowners, reviews are scheduled at varying hours over the course of many days. At the review, you will meet with a representative of our firm. He/she will review the property record card for accuracy, provide sales used in determining your valuation, and listen to anything you wish to tell us about your property. If you have any information that might lead to a revision of your property’s valuation, now is the time to present it to the representative. After your informal review, you will receive a second letter informing you as to whether or not your valuation has been revised.
If you are not satisfied with the result of the informal review, you may file a tax appeal with your County Board of Taxation. This appeal must be filed on or before Jan 15 of the tax year.
The new assessments become effective on January 1 of the new tax year. However, the new tax rate is not determined until the municipal, county and school budgets are established in the late spring/early summer of the year. The third and fourth quarter tax bills will be adjusted to account for any under or over-payment made in the first two quarters of the year. For example:'
New Assessment x New Tax Rate $500,000 x $2.00
First two quarters estimated tax payment (Based on previous years assessment & rate)
Remaining taxes due:
= New Annual Taxes
= $10,000
= $5,500 ($2,750 each quarter)
= $4,500 ($2,250 each third & fourth quarter)