These are some of the most frequently asked questions that we get at The Law Offices of Marina Dimentman. Please call us to discuss more in-depth questions. Our staff and lawyers will provide the answers you are looking for. We look forward to speaking with you.
We can be reached at 201-946-1770 or through our online contact form. Our firm offers free case evaluations to property owners throughout New Jersey and New York.
1. How is the value determined for my property?
Understand The Valuation Criteria: Gauging the fairness of your commercial property taxes requires a solid understanding of your property’s true value. Companies preparing to appeal their commercial property taxes should know the valuation criteria used to gauge the value of their property.
When commercial properties are assessed, they are typically done so using the following approaches:
- Income approach: This is one of the most commonly used evaluation approaches. The income approach estimates the tax value of the property based on the income that’s produced by evaluating the relationship between net income and value through capitalization. This can be done based on actual income and expenses or market assumptions. When properly developed and adjusted, this approach is a reliable indicator of market value.
- Cost approach: This approach estimates the cost new of the same property with the proper application of all forms of depreciation accounted for plus the land value. The underlying premise is that no one would pay in excess of the depreciated cost new of an existing building.
- Sales Comparison approach: In this model, the value of a property is based on the price per unit that similar properties recently sold for as it clearly identifies what market participants will pay for or sell a property for in an open market.
2. What does income and expense have to do with my taxes?
Owners of rental income properties must supply an income statement at the time of filing, on special forms provided by the Tax Board. Since the income generated by a property has a direct bearing on the owner’s ability to market the property, and therefore its value, this evidence may be useful in arguing both sides of an appeal.
3. Are the filing fees the same for commercial appeals as residential ones?
County filing fees as noted below are the same for each, with an additional $5 for Hudson, Union and Monmouth counties. State Tax Court filing fees are higher.
|Assessment Amount||Filing Fee|
|Assessed Value under $150,000||$5|
|$150,000 or more, but less than $ 500,000||$25|
|$500,000 or more, but less than $ 1,000,000||$100|
|$1,000,000 or more||$150|
4. Do I have to continue to pay the taxes on my property after an appeal is filed?
Yes. In New Jersey, your taxes must be current to appeal the assessment. If the taxes are delinquent the town can ask the County Tax Board (or the State Tax Court depending upon what venue the case is pending) to dismiss your appeal.
5. I received a letter from the town requesting income and expense (Chapter 91) information, should I respond?
If you own an investment property (also referred to as an income-producing property) it is critical that you timely respond to a chapter 91 request from the municipality. Failing to respond to the Municipality’s Chapter 91 request in a timely fashion can result in the dismissal of your tax appeal. In recent years, the Tax Court of New Jersey (and the County Boards of Taxation) has dismissed appeals when there has been no response but also in cases where the response was found to be inaccurate or misleading. Therefore, how you respond is as important as whether you respond will be the bases for your assessment. We recommend you consult a professional before submitting any Chapter 91 forms.
6. Do I need an appraisal?
The Law Firm makes every best effort to keep the cost of litigation as low as possible. Most Commercial tax appeals will require a formal appraisal for litigation. This is something our firm reviews on a case by case basis. We have extensive conversations with our Appraisers to make sure a case warrants contracting for an Appraisal. In most cases adding a formal appraisal to our litigation strategy strengthens the possibility of a successful appeal. Clients will be responsible for any appraisal/appraiser cost.
7. How will Covid-19 impact my tax appeal?
The Appeal Deadline is now July 1st, 2020 as per P.L. 2020, c 35. which was signed into law by Governor Murphy on May 28th, 2020.
There is no time to waste for the 2020 Tax Year. If the deadline passes, your opportunity for a 2020 appeal will be lost, although you can certainly still prepare for 2021, where the impact of Covid 19 may have a significant influence on value (see below).
8. Will effects of Covid-19 help make for a stronger case when filing an appeal?
Depending on the results of the economic impact of the COVID-19 pandemic, and the resultant partial shutdown of the New Jersey economy, many landlords may experience lower rental streams for 2020 and higher vacancy rates by year's end. Because the valuation date for the 2020 Tax Year is October 1, 2019, these circumstances may not be recognized in a 2020 appeal. However, they may well be relevant for the 2021 Tax Year which has a valuation date of October 1, 2020.
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