The comparison of owning a home in New Jersey or Long Island with owning a home in New York City shows that the city has one financial advantage: property taxes. In New Jersey, it’s hard to discuss the cost of owning a home without talking about property taxes. With high property tax rates, it’s worthwhile to take as many actions as possible to reduce those rates. When filing personal income tax returns, taxpayers look for every deduction and credit, saving hundreds or thousands of dollars, but most homeowners accept what they owe for property taxes, even though that could easily be a bigger bill than income taxes.
With home prices on average having dropped in the past few years, now is a perfect time to take a look at these taxes. The amount of property tax you owe is based on an assessed value of your house, and depending on where you live, that assessment could have occurred when the market was at its peak. On average, assessments lag behind current values by three years.
Homeowners could save thousands of dollars with a successful appeal. We’d like to think our home values continue to increase because we want to feel that the decision to buy a home will result in a good investment over time. When it comes to assessments for tax purposes, it’s better to have the lowest value possible. Review your recent assessment, and consider these factors for appeal:
- Comparable home prices. Look at actual sales of houses in your area. Knowing the current market is a key to determining a fair assessment for your house.
- Age of the assessment. If the assessment is from over a year ago, comparable homes in your area might have sold for less money more recently.
- Room count and layout. Most assessments are accomplished without definite knowledge of your house’s layout. There could be mistakes in your assessment that result in a higher value on paper, like too many bedrooms. If your basement is unfinished, you could argue for a lower assessment.
- Amenities. When assessments are based on comparable home prices, if your home does not have the same amenities as your neighbors’ houses, you could be unfairly assessed. If you don’t have a pool like the houses surrounding yours, you shouldn’t have the same property tax bill.
After you receive notice of your newest assessment, review it quickly and repeal right away. Review the property record card and look for inaccurate details. Take photographs of relevant features of your house. Look at documentation for comparable home sales in your neighborhood. When you have your hearing, bring all the documentation to support your case. Authorities are aware that most assessments are inaccurate, but they won’t do anything unless owners speak up, and some who are unsuccessful with the first appeal give up. The savings from a successful appeal could be substantial, so don’t give up until your home’s value is accurately assessed.