COVID-19 has severely impacted commercial property values by decimating rental income and increasing vacancies for income producing properties across the State. Most commercial properties will be over assessed and eligible for a tax appeal in 2021, as many municipalities have not adjusted property tax assessments to account for the severe economic downturn. Further, many municipalities continue to pursue appeals to increase assessments, even during this time.

The time to consider a tax appeal is now. The critical tax appeal deadlines are quickly approaching, and commercial property owners need to be prepared to file tax appeals for 2021 to get much needed property tax relief in order to mitigate against declines in revenue. The Property Tax Appeal group at Murphy Schiller & Wilkes LLP have already begun obtaining taxpayers property tax relief for 2021 and are currently providing free consultation to property owners considering an appeal this year. Failure to meet the important tax appeal filing deadlines may completely bar your right to file a property tax appeal this year. Below is an overview of the strict filing deadlines and process.

Notice of Assessment – February 1, 2021

The first step in the appeal process is to carefully review your Notice of Assessment. Taxpayers typically receive the Notice of Assessment by the first week of February. The Notice of Assessment will contain important information regarding your assessment. It lists the 2021 assessment for your property, the prior year’s assessment, and the prior year’s taxes. However, it does not include the taxes due for 2021 based on the new tax assessment. Importantly, you will not know the taxes you owe for 2021 until the third quarter of 2021, after the deadline to appeal. The decision to appeal is based solely on the assessment and its relationship to market value, not on the amount of taxes due.

Appeal Deadline – April 1, 2021

After receiving your Notice of Assessment, there is a very small window of time to consider whether to file an appeal. Unless the municipality has undergone a municipal-wide revaluation or reassessment, the strict deadline for taxpayers to file an appeal directly to the New Jersey Tax Court is the later of April 1, 2021, or 45 days from the date the bulk mailing of the Notice of Assessments is completed. This is also the deadline to file an appeal to the County Board of Taxation in every county except Monmouth County. Filing deadlines are strictly enforced. Failure to meet the filing deadline may completely bar your right to appeal your assessment for 2021 regardless of the unfairness of your assessment and tax burden.

Revaluation Deadline – May 1, 2021

The deadline to file an appeal in the New Jersey Tax Court and the County Board of Taxation for municipalities that have undergone a municipal-wide revaluation or reassessment is the later of May 1, 2021, or 45 days from the date the bulk mailing of the Notice of Assessments is completed. Notable municipal-wide reassessments this year were performed in Hackensack and Paterson.

Where to file

If the assessment is over $1,000,000, the taxpayer may file an appeal in either the Tax Court of New Jersey or the County Board of Taxation of the county where the property is located. If the assessment is $1,000,000 or less, the taxpayer must file with the County Board of Taxation.

Deciding whether to appeal

Deciding whether to file a property tax appeal requires careful analysis and consideration of your tax assessment, as adjusted by the applicable county equalization ratio, and its fairness in relationship to the true market value of the property. Importantly, in New Jersey, a municipality has the right to file a counterclaim to seek to increase your assessment if it determines you are under assessed. Therefore, failure to properly evaluate your case prior to filing may prove costly. It is vital to use experienced legal counsel to review your assessment to determine the risks and benefits prior to filing an appeal in order to understand the tax relief available and to avoid an unwanted tax increase. As market and property conditions fluctuate every year, it is vital to reexamine your property on an annual basis for eligibility for a tax appeal.

Consultation

To determine whether your property may be eligible for an appeal, the experienced team at Murphy Schiller & Wilkes LLP is ready to provide a complimentary evaluation of your property. If we determine that an appeal will be beneficial, we will recommend a strategy to reduce your tax burden and can file and pursue your appeal. As a dedicated commercial real estate firm, our team has invaluable insight into the real estate market and has successfully litigated the value of virtually all property types. Our team also has considerable experience advising on tax exemptions, or other tax incentive programs, that may be available to reduce the property tax burden outside of the appeal process. Our experience and deep broad-based knowledge allow us to consider all options that may be available to potentially reduce your tax burden.

For additional information concerning our property tax appeal services, or to request an evaluation of your property, please contact:
THOMAS S. DOLAN
Partner – Property Tax Practice Leader
(973) 705-7412
tdolan@murphyllp.com