“Fair Share” May Not Be So Fair in a Declining Real Estate Market

February 2008Alerts Tax Appeals Practice Area Bulletin

Property Taxes in a Declining Real Estate Market: What’s Really Fair?

Every taxpayer is required to pay their fair share of real property taxes but not a dollar more. You may have an opportunity to reduce your tax property’s burden, but you have to act now. Under New Jersey law, all properties, residential and commercial alike, are supposed to bear only their fair share of the tax burden based on a common method of valuation.

Recent trends in the real estate market indicate that the upward trend in property values is a thing of the past. Even though Congress and the Administration are creating an economic stimulus package and the Fed has lowered interest rates, the impact on real estate may lag or not be felt. These and other factors may adversely impact commercial and industrial values and rental rates.

While these circumstances may be beneficial to a prospective tenant or buyer, property owners and tenants who pay property taxes could be paying property taxes that are unfairly high. Although the municipal tax rate cannot be directly challenged, taxpayers can appeal their property’s assessment to obtain relief. A successful appeal reducing the assessment will result in reduced taxes.

Commercial Property Owners Need to Act Now

Notification of the 2008 assessment for all properties was mailed earlier this month. April 1, 2008, is the deadline to file an application to contest 2008 assessments. As the April 1 deadline cannot be further extended for any reason (except in very few circumstances), your appeal must be filed and received by that date.

Every owner of a substantial commercial, industrial or investment property in New Jersey is advised to consider filing an appeal annually. Lessees who are responsible for payment of the real estate taxes on a property and contract purchasers also have standing to file an appeal. In addition to the dollars saved, a property tax reduction can make a property more attractive to a prospective purchaser.

If you own, net lease, or manage property in New Jersey, now is an ideal time to file a tax appeal. If you work with clients who own, net lease, or manage property, urge them to contact our tax appeal lawyers:

Jeffrey M. Hall, Esquire
[email protected]

Alexander Wixted, Esquire
[email protected]