Commercial Property Appeals in 2016

New Jersey continues to place the country’s heaviest real property tax burden on commercial and industrial property owners. While any substantial property may be a candidate for a successful appeal, real property tax appeals generally present most significant financial benefits to owners of large industrial, commercial or multi-family residential rental properties. A careful analysis of the tax assessments of those properties is warranted to determine whether they are being appropriately assessed and not being charged more than their fair share of taxes. Even as general market conditions have improved for some property classes, the question of whether a particular property is properly assessed remains an essential exercise of due diligence for any stakeholder of real estate in New Jersey.

On or before February 1, 2016, the tax assessor for each taxing district issues a “Notice of Assessment,” which lists, among other information, the property assessment for 2016. It is important to understand that unless there has been a district-wide revaluation, that “assessed” value is not necessarily the “market value” claimed by the municipality through the assessment. Rather, the municipality must defend the “imputed” or “equalized” value of the property, which takes into account the average assessment in the district as a percentage of the average useable sale in the district. This equalized value is often higher than the assessment and is the value to be used in testing whether the property is fairly assessed.

An appeal of a 2016 assessment must be filed on or before April 1, 2016. All appeals may be made initially to the County Board of Taxation, but if the assessment (not the market value) exceeds $1,000,000, then the appeal may be made directly to the New Jersey Tax Court. Direct appeals to the Tax Court must also be made by April 1, 2016.

CSG’s Tax Appeal Group has successfully handled appeals involving regional shopping malls, four-star hotels, corporate headquarters, office buildings, multi-family apartment buildings and complexes, industrial properties from warehouses to special purpose properties such as chemical plants, oil refineries, breweries, regional reservoirs, and recreational properties such as golf courses and amusement parks. We welcome the opportunity to evaluate properties for appeal potential at no charge to the owner. Tax appeals generally are handled by the firm on a contingency fee arrangement, although other fee arrangements, including application of standard hourly rates, can be utilized.