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Real Estate Tax Appeals For Businesses And Homeowners

Real Estate Tax Appeals for Businesses and Homeowners

In New Jersey, real estate taxes are a common sore point. We maintain the dubious distinction of having the highest property taxes in the country. In 2014, average taxes rose to $8,161 per property. While an annual 2.2% tax increase may seem reasonable at face value, the result is that property taxes in New Jersey have never been higher.  (Source: www.nj.com)

A critical planning strategy for many businesses and individuals is to periodically review whether you could be paying too much in property taxes. After all, your official tax assessment may or may not be accurate, given the multitude of factors that affect property values. Business owners who either own their commercial real estate or are responsible for real estate taxes as part of their lease payments are eligible to appeal their tax valuations. The deadline for filing an appeal (for both businesses and individuals) is April 1st.

To drill a bit deeper into New Jersey home prices, we reviewed the Federal Housing Finance Agency (FHFA) New Jersey House Price Index. This index looks at average price changes in repeat sales (sales of the same homes over time) and home refinances. The chart below, with data through Sept. 30, 2014, shows that New Jersey home values are still well below the peaks that occurred in the mid to late 2000s. It seems ironic, then, that average property taxes are higher than ever.

house chart

Of course, like most things related to real estate, specific location and property considerations must be considered on a case-by-case basis. For example, many Northeast homes were damaged by Hurricane Sandy in 2012, resulting in reduced values of many of these homes. Some of the hardships related to this damage might be eased by a property tax reduction—if the owner can make a solid case for a tax appeal.

You can file a real estate tax appeal on your own, as an individual, however, keep in mind that the tax-appeal process can be quite technical and there is always a risk that your appeal could lead to higher taxes if an assessor finds that your property is actually valued too low. In the case of business tenants who share a building with other firms, there is also a chance that your appeal could result in a counterclaim that increases taxes for all of the tenants. Before filing an appeal on a shared space, it might be wise to consult with—or at least inform—your fellow tenants.

Also, be absolutely sure you follow all of the necessary steps—or work with a qualified attorney—to ensure that your claim is properly handled. A real estate attorney should be able to evaluate the potential success of your claim before you file. In all cases, it’s up to the property owner to provide proof that the property taxation is incorrect. This often means researching your town’s average assessed property values and average tax ratios, and comparing your own property to those figures.

In business property tax appeal filings, keep in mind that an attorney must always represent corporations, Limited Liability Companies(LLCs), and other business entities to the taxation board.

That April 1st deadline for filing a property tax appeal is quickly approaching. For more information on filing an appeal, feel free to consult a qualified attorney or your Wealth Advisor.

 

Important Disclosure Information

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request. This presentation is not a substitute for personalized advice from RegentAtlantic.  This information is current only as of the date on which it was sent.  The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic.  Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

Please remember that RegentAtlantic does not provide legal advice.  Please consult with your attorney prior to implementing any of the strategies discussed in this article.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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