NJ Property Tax Appeals Down More Than Half in 3 Years
Property tax appeals in New Jersey fell for the fourth straight year in 2016 to their lowest level since 2008, an indication people were less stressed about the value of their homes and, by extension, the condition of the overall economy.
However, the number of appeals, 49,286, remained higher than it had been in any of the dozen years leading up to the financial crisis of 2008.
"Better" doesn’t mean fully recovered.
“It’s a combination of the market value of properties appreciating over the last few years, since the downturn in the market, and also you’ve seen more reassessments or revaluations completed in municipalities, bringing the values back to market,” said Martin Lynch, president of the Association of Municipal Assessors of New Jersey
Before the recent declines, the number of appeals had climbed for six straight years – a fivefold jump that peaked at more than 116,000 appeals in 2012, following by almost 106,000 more appeals in 2013, when people saw that homes were selling for less than what their properties were assessed.
“The peak of the appeals was really a direct result of a huge downturn in the market, and now that the market began to recover and values are appreciating, there’s just not a need for the assessment appeals to be filed,” Lynch said.
The numbers of appeals closely, and inversely, track whether property values are going up or down, said Michael Darcy, executive director of the New Jersey State League of Municipalities.
“As the economy improves and property values improve, you would normally see that there would be a lot fewer appeals,” Darcy said.
“When people’s property values are going up, and their tax assessments are coming in at the old values, they don’t typically want to go appeal their property assessment because the assessment is lower than what they see happening in the open market,” Darcy said. “So they think: Why should I bother getting assessed at a higher level.”
Big Apple a big help
The number of appeals last year amounted to 42 percent of the peak total. The largest post-peak declines in appeals have been seen in Bergen, Burlington, Cape May, Gloucester, Hunterdon, Middlesex, Morris and Ocean counties.
Sen. Paul Sarlo, D-Bergen, said tax appeals are down in Bergen County – to 3,817 last year after exceeding 12,000 in both 2012 and 2013 – because of the strength of the New York City economy.
“The value of the homes in North Jersey, the economy, is just really taking off. We’re seeing that in towns in their revaluations. The values are increasing. And it’s because of working with Manhattan, the interconnectivity in Manhattan,” Sarlo said.
Sarlo said that’s a reason why New Jersey officials are putting such an emphasis on replacing the Port Authority Bus Terminal. The Port Authority of New York and New Jersey board this week approved $70 million for planning efforts toward a terminal that could cost $7.5 billion to $10 billion.
“That could easily reverse itself,” Sarlo said of gains in property values. “If we don’t stay on top of this, and these commutes become difficult, time-consuming, unsafe, you’re going to see people start to sell homes very quickly in North Jersey.”
In Bergen County, the total assessed property value topped $154 billion last year – its highest since 2012, though still not returned to its pre-recession peak.
Not all counties have seen the same deep plunges in property tax appeals.
In Salem County, the number of appeals filed in 2016 was the highest since at least 1990, at 602. Appeals were down by a quarter in Sussex County, a third in Union County and half in Hudson and Warren counties.
In Atlantic County, where the casino-closure fueled uncertainty in Atlantic City has roiled the region’s economy, they’re down by around one-third from their peak. The 9,169 appeals last year amounted to almost 7 percent of all the properties in the county, twice the rate of any other county.
Monmouth County’s number of appeals last year, 5,017, amounted to 63 percent of the county’s recession-era peak. Monmouth is a unique situation in that it is operating a demonstration project that uses technology to adjust assessments annually.
Other than in Monmouth County, the deadline to appeal a property tax assessment is April 1.
Lynch, who is the tax assessor in Manchester Township in Ocean County, expects fewer appeals again this year, at least in his municipality.
“I think the number of appeals are going to further decline in 2017, based upon the phone calls that we’re receiving since the assessment notices have gone out on Feb. 1,” Lynch said. “The response over the last couple of weeks has been minimal.”