Tue, Apr 1, 2014

Business, Community, Real Estate

April fools and Property Tax AppealDeadlines !!!!

BY lyanne

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With many types of commercial real estate still reeling from the downturn, New Jersey faces a tidal wave of property tax appeals from thousands of weary, often cash-strapped building owners across the state. And it’s only likely to get worse.  Exactly how much worse will become clearer after April 1, the deadline for filing property tax appeals in most towns in New Jersey.

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In the city of Newark, for example 2012 the ratio between set residential values versus commercial, was 60 percent and 40 percent respectively, now after revaluation of 2013, it is exactly the opposite the burden has now been reversed, 60 percent for commercial and 40 percent on residential. In addition, the effective tax rate went up from $2.30 to $2.99.  So it has a double impact for commercial property owners.
The increase assessment, along with increase tax rates make it no surprise that the tax court has over 45,000 pending case and only six Tax Court Justices to preside over them, said  Frank Ferruggia, a McCarter & English attorney who specializes in property tax appeals. “The good news is  the Newark administration recognizes this problem and has been settling some cases.”  So the forecast is mixed, on the one hand you have a positive story of this new development, but at the same time there are a few is a negative with the increasing vacancies in the Gateway buildings. With the positive of the new construction, the challenge of increase availability of space, in particular, in the Gateways, and other buildings need to be reflected in the tax assessment.  There is expected another 10,000 – 15,000 by the deadline today.

If final projected number come in as expected, we will see appeals double from last years filings of more than 25,000 new cases that were filed during fiscal year 2013, a total that’s more than double the new filings in 2008 and one that has grown in all but two of the past 10 years, the report said. A majority of these appeals are being filed by the commercial sector, with half of those new cases came just from Bergen, Essex and Passaic counties — while Morris, Monmouth and Middlesex each had more than 1,500 new filings.

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Experts say there are no signs of a slowdown on the horizon. , said the market for properties such as office buildings has not recovered to pre-recession levels — and expenses are rising as rental and occupancy rates remain stagnant.

“There’s really very little incentive for towns to reassess and reflect a declining market,” said Ferruggia, a partner with the Newark-based firm. “People have to file appeals and get their remedy, and those are not happening that quickly.”

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Local governments are taking any number of steps to deal with the avalanche of appeals, they include trying to set aside extra cash in their budgets for settlements, short-term financing, reducing services and even raising taxes, he said.

It’s a perfect storm that is only adding to New Jersey’s backlog of pending property tax appeals, one that has been swelling since the downturn. Ferruggia said the state’s tax court, which currently has six judges, is “trying to manage their case load as best they can,” but the sheer volume means it can take more than a year to settle a case.
The state also is grappling with appeals for residential property, which are lumped in with the tax court data. But experts say those are largely handled by county tax boards, which hear appeals for property assessed below $1 million and tend to resolve cases more quickly.



If you have questions regarding the filing please go the essex county board of appeals, located in the Economic Development Building, at 50 South Clinton Street, Suite 5200, East Orange, NJ 07018. Our phone number is 973-395-8525, or visit their web-site at

After filing the appeal if you need to obtain an appraisal or need a assessment professional to provide expert testimony regarding your property value, contact the Appraisal Authority, attached is a you tube follow-up by this organization

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