Property Revaluation - An Overview and Frequently Asked Questions (FAQs)
Property Revaluation – An Overview
Notice To All Residents: All data collectors for Realty Appraisal Company, which is conducting the city-wide property revaluation, carry two forms of identification. One is a Realty Appraisal Company Photo Id and the other is a letter ID signed by the Tax Assessor. They are all registered with the Jersey City Police Department.
No data collector will take any photographs inside the home EVER. Most of the work is done Monday through Saturday, though a few data collectors do work on Sunday. Once again, they are registered with the Police Department. If you have any doubts about the data collector at the door, do not allow them admittance and call 911 immediately. Download photos & ID of reval inspectors here. Read more here.
Mayor Healy has requested the Hudson County Board of Taxation for an Order to Implement a City-wide Revaluation. The Board on its regular meeting has deliberated and sent the Order to the City of Jersey City. Read the County Tax Board Order to the City of Jersey City here.
The purpose of this revaluation is to ensure a fair and equitable redistribution of the City’s tax levy so all property owners are shouldering their fair share of the City’s tax burden. This will be the first property revaluation since 1988.
The property revaluation is being done for several reasons. The New Jersey Constitution requires that all real property be assessed according to the same standard of value; and such property shall be assessed for taxation under general laws and by uniform rules. According to state law, every property’s fair share is based on its market value as of the assessing date.
Currently, most properties in Jersey City no longer reflect the assessed value which was assigned to them during the last property revaluation, which was conducted 22 years ago
During those 22 years many changes in the real estate market have taken place—new housing and commercial properties have been constructed while older, dilapidated structures have been torn down, rehabilitated or replaced. Prices have fluctuated. Houses which appear exactly the same from the street may be drastically different inside due to renovation, repairs, deterioration or lack of maintenance, the addition or removal of a rental unit, or a change of property class from residential to commercial.
When you compare the current true market value to the assessed market value (set in 1988) of many properties across the city, you can see that they are dramatically skewed and out of line with the average assessed market value of city properties as a whole.
This means that instead of each property paying its fair share of city taxes based on its assessed value (which should be an accurate reflection of each property’s value in today’s real estate market), many properties are under assessed and are therefore under paying property taxes.
When this happens, other property owners are picking up the extra tax burden. An example of this would be someone who bought and renovated a house a few years ago when the real estate bubble was at its peak. Now that the real estate market has collapsed, that homeowner may be paying taxes on a property which is no longer worth anywhere near its 2006 assessment. That property owner is probably paying more than her fair share.
What Is A Revaluation?
A revaluation is when a municipality appraises all real property within the municipality, according to its full and fair value. Full and fair value simply means current real estate market prices, or what that particular piece of property, in that condition, in that specific neighborhood, would currently sell for between a willing seller and a willing buyer.
A revaluation will appraise each property based on its current market value and, as a result, each property’s taxes will be based on that current market value. Cities undertake property revaluations periodically to update housing valuations for the purpose of attaining uniformity in assessments.
What Is The Purpose Of A Revaluation?
The purpose of the revaluation is to redistribute the existing tax levy so it is more fairly distributed among all property owners in the city.
What Is The Tax Levy?
A tax levy is simply the amount of taxes the city collects to pay salaries and services rendered.
What Determines When It Is Time To Do A Property Revaluation?
By law, the Tax Assessor conducts an annual sales study and submits it to the state. The study shows whether there is uniformity in assessments. When there is an absence of such a standard, a revaluation is undertaken to insure that all taxpayers pay only their fair share of the tax burden - no more, no less.
Since market conditions change, and property assessments may change over time, the relationship between assessments and market values becomes more skewed, and they must be brought into line with each other.
How Do Property Assessments Which Are Significantly Different From The Current Real Estate Market Really Affect My Tax Bill?
The last citywide property revaluation was conducted in Jersey City in 1988. At that time, your neighbor’s house may have been assessed as having a fair and full market value of $75,000.
Yet, 22 years later, common sense tells us that it is highly unlikely that your neighbor’s house is still worth only $75,000. It probably has gone up or down in value. Neighborhoods change over the years - stores come and go, transportation lines are added or taken away, apartments, condominiums and schools are built, some houses are renovated, some have no work done to them and some are torn down and replaced.
If no work has been done to his property, your neighbor with the 1988 assessment is most likely not shouldering his fair share of the property tax levy. As a result, other property owners (including you) are picking up the shortfall caused by your neighbor’s out of date assessment. This is particularly true for those who purchased new housing during the real estate boom or have done extensive renovation or repairs on their properties since 1988.
Great! So This Reval Means My Property Taxes Are Going Sky High, Doesn’t It?
No. Most people, when they hear the term “property revaluation” incorrectly believe that a reval raises all the taxes on all the properties in the city.
A property revaluation is mandated by state law so that assessments of all properties in a municipality are brought up to, or as near as possible to, 100% of market value. This is the best way to insure that every property, based on its market value, pays its fair share of the municipal, school and county tax burden.
While all property revaluations are different, the general “rule of thumb” for a property revaluation is that 1/3 of the municipal properties will see their share of the tax burden go down, 1/3 will see their share of the tax burden go up, and 1/3 of assessed municipal properties will see no change at all.
Remember - fairness and equity are the goals of any property revaluation.
So, Are All Properties In Jersey City Really Still Listed On The Assessor’s Books At Their 1988 Assessed Value?
No. Some are. But there are exceptions which affect a property’s assessed value.
The first is newly constructed property, which is assessed at the time of its completion. So, for example, if you own a building which was completed in 2005, that property’s assessment probably still reflects what the assessor determined to be its full and fair value according to the 2005 real estate market.
The second exception is if a property has been renovated or has undergone substantial repairs. If you improved or enlarged a dwelling since the last assessment, inspectors have been in to inspect the property for repairs and improvements. Then, and only then, can the property be reassessed according to its full and fair value, which is a reflection of the then current real estate market rates.
The third is when a property assessment is appealed. As a result of the appeal decision, the property assessment may change.
The fourth instance is when a property is damaged by fire. After a fire, the property is inspected and depending on the damage, the assessment may be lowered. If the owners of the property rebuild, then once again, that property will be assessed at its full and fair market value at the time of its completion. If the property is razed, then the vacant lot is reassessed.
Why Revalue Property Assessments Now, Particularly With The Burst of the Real Estate Bubble?
Now is the best time to do a property reevaluation because property values are at their lowest.
Over the last 22 years, Jersey City has undergone a tremendous growth in both residential and commercial properties. During the 2000s, like most of the country, we saw real estate prices escalating far beyond their reasonable worth. Since the near collapse of the global economic financial system in October of 2008, we’ve seen Jersey City inundated with a substantial number of underwater mortgages and short sales.
I Bought Only A Year Ago. Wasn’t My House Reassessed At The Time Of
No. Properties are not automatically reassessed when they are bought and sold. That is called “spot assessment” and it is illegal.
Are Tax Abated Properties Included In The Revaluation?
Yes. Even though abated properties make payments according to different rates and schedules, they are still required to be assessed. This is so that when the tax abatements expire, they will be taxed according to their correct assessment value.
A Reval Is Just An Excuse To Raise Everyone’s Property Taxes, Isn’t It?
No. State law decrees that all property owners must pay their fair share of the municipal, school and county tax levy. The tax levy is nothing more than the amount of money collected every year to perform city services like resurfacing roads, cleaning streets, plowing snow, and collecting garbage and recyclables.
This pool of money also pays the salaries of city employees, like police, firemen and government employees. Taxpayers must also pay for schools and the municipality’s share of Hudson County’s expenses. If state aid to the city is nonexistent or remains static, that also affects the municipality’s budget, and therefore its tax rate.
A revaluation in and of itself has no affect on the city’s tax levy.
What Happens To The Tax Rate After A Revaluation?
Because the ratable base (total assessed value of all properties in a city) goes up after a revaluation, the tax rate is adjusted downward.
Why Do You Need To Come Into My Home?
The state mandates that we attempt to inspect the interior of every dwelling and commercial, industrial, or apartment building in the city. Inspecting the interior of your dwelling helps the assessor and the revaluation company’s appraiser make a more accurate valuation of
In addition, because inspectors will be using tax maps and street indexes to help them correctly locate and identify properties during the Reval, all property street addresses should be prominently displayed and easily visible from the street, as required by City Code (108-5).
Residents who have any questions about their property address should contact the Tax Assessor, who is authorized to designate or change the street number of any building.
I Have Not Made Any Improvements To My Property Since The Last Reval. Why Does My House Have To Be Inspected?
Unless an interior inspection is made, we cannot determine the current condition of the property. If the interior of your property has remained unchanged over the years, you should encourage the inspector to see the property's interior condition.
Who Will Inspect My Property?
The person inspecting your property is a trained full-time property inspector. He or she is not a tax assessor and not an appraiser. He or she will not be formulating a value of your house. The inspectors are trained to measure the exterior of the property and to inspect both the exterior and interior and report their findings to the revaluation company’s licensed appraiser.
What Kind Of Identification Do The Inspectors Carry With Them?
These inspectors will have two forms of identification: a company-issued badge with photograph, and also a town-issued letter of introduction. Please make sure to check their identification before allowing them into your dwelling.
If you have ANY doubts about the Inspector at your door, politely get their name, and ask them to wait (locking the door after you). You should then contact the City's Reval Hotline in our Citistat office at 201-547-4538 and verify that there is an inspector by that name and description working in your area on that day.
I 'm a Senior and Live Alone. I'm Nervous About Letting Strangers Into My House.
If you are uncomfortable, then schedule an appointment with an inspector when you can have a friend or relative in the house with you while the house is being inspected. Having a friend or relative there while you’re property is being inspected is reassuring, particularly for senior citizens and stay at home parents.
How Are The Revaluations Done?
Licensed appraisers review the inspection data. They then analyze all recent property sales in each neighborhood, giving most weight to the sales which occur within one year of October 1st of the year the reval is being conducted. Those sales are used to formulate all of the valuations in that specific neighborhood.
What Is The Inspector Looking For Inside My Home?
Contrary to popular belief, they are not looking at your personal belongings, like furnishings, or your pets. They are counting rooms and baths, noting the type of heating system and how old or new it is, as well as checking out amenities such as fireplaces, decks, patios, etc. They also look at the condition of the property, the age of the fixtures, as well as any problems with the condition of the building you bring to their attention.
Do I Have To Let The Inspector Into My House?
No. You are not required to allow an inspector to enter your home. If you decide not to allow an inspection, however, it is possible that your valuation could be substantially higher than if you allowed the inspector into your house.
Here’s an example. You and your neighbor own row houses which are for the most part identical. You have the same number of rooms and baths, same layout, same number of fireplaces. You’re house, however, has the furnace which you replaced in 1994 and your kitchen was last remodeled in 1983. Your neighbor, however, replaced her furnace two years ago and redid her kitchen earlier this year.
If you choose not to allow inspectors into your building and your neighbor does, it is possible your assessment will be based in part on your neighbor’s improvements and your property will come in at a higher assessment than really would be fair for your property, had it been inspected.
In fact, after we mail out our valuation letters at the end of a reval, often the first people that call us for an appointment are those who did not allow an inspection. Before we can discuss the new valuation with them, they will be required to allow us an interior inspection of the dwelling.
I Return Home Late From Work. How Will My Home Be Inspected?
Our inspectors will make three attempts to inspect your property, usually arriving at different times, on three different days. If, after the second attempt, they are unable to gain entrance, they will leave a card at the door with a telephone number you may call to arrange an appointment.
I Successfully Appealed My Assessment Last Year And Was Told That The New Assessment Would Be Frozen For 2 Years. How Will The Reval Affect My New
Your reduced assessment will not be applicable in the Reval year. However, if you disagree with your new revaluation assessment, you may file an assessment appeal with the Hudson County Board of Taxation. If successful with this appeal, then the new reduced assessment is frozen for 2 years. So, for example, if an appeal is settled and frozen for either 2011 or 2012, the settlement would not apply for the 2013 tax year if the Reval goes into effect that year.
Is There Anything I Should Do Before The Revaluation Takes Place Which Will Help Ensure My Property Is Properly Assessed?
Other than being aware that a reval is underway and making sure your property exhibits its correct street number, which the City requires for correct geographical location in the event of an emergency, no, there is nothing more you need to do.
When Will I Be Notified About My New Assessment?
Once all of the values have been determined by the revaluation firm, the Tax Assessor will conduct a review, and either approve the values, or modify them. After the review and modification are completed, the revaluation firm will mail a notification letter to each property owner in the city. By regulation, this letter cannot be mailed before November 10th of the year the reval is conducted.
What Should I Do When I Receive The Value Notification Letter?
Read the Value Notification Letter carefully. In it you will find not only the new valuation of your property, but instructions on how to proceed, depending on whether or not you agree with your property's assessment. If you believe the new valuation is an appropriate assessment of your property’s value, and in line with recent sales in your vicinity, you don't need to take any action.
If, however, you disagree with the appraisal or would just like to review it with the revaluation firm, you should call the phone number provided in the Value Notification letter and schedule an appointment to discuss your new valuation.
How Are The Reviews Conducted?
Informal reviews will be held in a convenient location in Jersey City, at or near City Hall. They will be scheduled on a variety of days, including Saturdays. They will also be held from early mornings to the evenings, in order to accommodate a variety of schedules.
A member of the revaluation firm will meet with you at the review. He or she will review the property record card, make sure the data is accurate, show you which sales were used in determining your valuation, and listen to anything you wish to tell them about your property.
If you have any information that might lead to a revision of your property's valuation, the informal review is the time to present it to the representative of the revaluation firm.
After your informal review, you will receive a second letter informing you as to whether or not your valuation has been revised.
What Is My Recourse After The Informal Review?
If you are not satisfied with the result of the informal review, you may file an assessment appeal with the Hudson County Board of Taxation. This appeal must be filed on or before May 1st of the tax year.
When Will I Know What My New Taxes Are?
The new assessments will become effective on January 1st of the tax year following the receipt of your change of assessment. For example, if you receive your Value Notification Letter on November 10, 2012, then your new assessment becomes effective on January 1, 2013.
However, the new tax rate is not determined until the municipal, county and school budgets are established in the late spring/early summer of the year. The third and fourth quarter tax bills will be adjusted to account for any under or over payment made in the first two quarters of the year.
If I’m Not Happy With My Assessment After My Informal Review, How Do I Appeal My Taxes?
You don’t appeal your taxes. You appeal your assessment.
An appeal before the Hudson County Board of Taxation or the Tax Court concerns only your assessment (i.e. the market value of your property). The County Tax Board commissioners cannot change the amount of taxes you pay, short of determining that your assessment does not reflect the market value.
Market value is proved by presenting to the Board evidence of sales of properties that are comparable to your property in size, age, condition and location.
So for example, all the property sales which you bring to the board as evidence must have occurred on or before October 1st of the pre-tax year.