Commercial Property Appeals in 2020

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 or managers of 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 continue to be strong 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. There may be unique factors impacting a property’s value which are immune from general market conditions such as the existence of environmental contamination or other unique features of a property.

On or before February 1, 2020, the tax assessor for each taxing district issues a postcard “Notice of Assessment” which lists, among other information, the property assessment for 2020. It is important to understand that, unless there has been a district-wide revaluation, “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 usable sale in the district. This “equalized” value is often higher than the assessment and is the actual value to be analyzed in determining whether the property is fairly assessed.

An appeal of a 2020 assessment must be filed on or before April 1, 2020. All appeals may be made initially to the County Board of Taxation, but if the assessment (not the equalized 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, 2020. The only exception to the April deadline is if the municipality has performed a district-wide revaluation or reassessment in which case the deadline is May 1, 2020.

CSG’s Property Tax Group has successfully handled appeals involving regional shopping malls, hotels, casinos, corporate headquarters, office buildings, multi-family apartment buildings and complexes, industrial properties from warehouses to special purpose properties such as chemical plants, power generation 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. 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.

Finally, property owners should also be aware of a recent development in the tax appeal arena. As a result of an exceedingly strong market in some asset classes, especially industrial/distribution facilities and multi-unit residential properties, some municipalities have actually begun filing what have come to be known as “Reverse Tax Appeals.” In these actions the municipality is the “plaintiff” in an appeal which seeks to increase a property owner’s tax assessment. CSG’s Property Tax Group has handled many of these cases and is uniquely qualified to represent you should your property be subjected to such an action.