SPRINGFIELD, NJ—New Jersey commercial property owners andinvestors need to keep close tabs on local property tax assessmentsto ensure that their properties are fairly valued, or they may beoverpaying taxes, warns a New Jersey attorney specializing inproperty tax appeals.

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Daniel Kanoff, an associate atSpringfield-based Blau & Blau, tellsGlobeSt.com exclusively that commercial propertyowners and investors should carefully evaluate assessments on theirproperties with an eye toward appeals. In most counties, taxappeals must be filed by April 1 of each year (in Monmouth County,a pilot reassessment project makes the filing date January 15).

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Kanoff, who practices in the areas of propertytax appeals, eminent domain, and real estate and has appearedbefore the New Jersey Superior Court, the New Jersey Tax Court, andmany of the 21 county boards of taxation, gives property ownerssome guidance on the tax appeal process. Part two of this Q&Awill appear on GlobeSt.com tomorrow.

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Question: How does the New Jersey property taxappeal system work?

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Kanoff: There is a defined process that appealswork through.

  1. Assessments of $1,000,000 or less must go to county board oftaxation first.
  2. Assessments of more than $1,000,000 can go directly to the NewJersey Tax Court.

Either way, appeals must be filed by April 1, unless there is amunicipal wide reassessment of revaluation. However, in MonmouthCounty, a pilot program is underway and appeals need to be filed byJanuary 15. If there is a revaluation, the date is extended untilMay 1.

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Question: What is a revaluation orreassessment?

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Kanoff: Typically, except in Somerset County,assessors just carry the assessment forward from one year to thenext. In Somerset County, there is an annual reassessment,not because of any rule, just because local custom. As real estatevalues increase the ratio of assessed value to true valuedecreases. If in the revaluation year every property isassessed correctly, the ratio is 100%. If, over time allvalues double, the ratio would decline to 50%. When the ratio getstoo low, assessor's will often bring in an outside firm to bringall the assessments to true value.

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Question: New Jersey property tax appeals comeunder something called Section 123 – what is that exactly?

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Kanoff: Section 123 describes the procedure forvaluation of property. Every municipality has a differentratio.

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Question: So what should commercial owners knowabout the ratios?

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Kanoff: They should be aware that there is aratio and it changes every year. It's a moving target, so what youhave to prove to win an appeal also changes every year.

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Question: How do you figure out whether yourproperty is assessed properly?

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Kanoff: You make the evaluation based onexamining the current rent rolls, recent leases, and leases in thearea. You take the assessment, find out the ratio, and calculatesomething called the “upper limit value” – that is the highestvalue range in which the property can be valued for you to win anappeal to get the assessment lowered.

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Question: How successful have you been withappeals?

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Kanoff: We're having success in the low to mid90 percent range, but that's because we carefully evaluate everycase for its likelihood of success before we submit the appeal.

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Tomorrow: Kanoff examines the math behind a hypotheticalproperty tax appeal.

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Corrections: The article incorrectly statedthat a pilot reassessment project in Monmouth County makes thefiling date January 1. The correct date is January 15. In thediscussion of Section 123, the article originally stated that everycounty has a different percentage ratio. That was not correct andhas been deleted.

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Steve Lubetkin

Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].