By now, at least a third of the town has received their new assessment number. The others are still questioning “are my taxes going to increase?” You should receive your new assessment by the end of the month if you haven’t already. Common questions and tips answered below.
The purpose of the revaluation is not for the municipality to collect more revenue, but rather for the tax burden to be apportioned fairly among property owners based on the fair market value of their homes.
Westfield is currently working with Realty Appraisal Company, a third party that will be performing the property inspections and working with the town’s tax assessor to determine the new property assessments. They have approximately 600 more homes to inspect, mostly in the Wychwood area. In my experience dealing with other towns that recently went through a revaluation, if you don’t let the representative from the town’s appraisal company into your home initially and you want to appeal your assessment, the appraisal company will request to see the property again.
To calculate what the township thinks your market value* is, take your 2018 assessment* and divide it by the town’s ratio* of 24.05 and then multiply by 100. If your assessment is $200,000, the township would have your market value at $831,601.
2018 Assessment = $200,000
($200,000/24.05)*100 = $831,601 township market value
Once the revaluation occurs, the ratio will be 100%, and it will no longer be necessary to calculate your market value. Therefore, with the new ratio, the new market value would be:
2019 Assessment = $850,000 Township’s Market Value = $850,000
The new assessment will represent the township’s determination of your fair market value.
Now you can compare your old assessment with the new one. Even if your new assessment doesn’t show an increase in market value, it is possible that the property is still being over assessed and has been all along. In that case, it may be worth looking into to see if the home would be eligible for an appeal.
Your new assessment may be higher than the fair market value. For example, the calculation for your 2018 assessment may be $831,601, and your new assessment could be $950,000. If you believe the new assessment is too high, you can appeal that value. Ordinarily, there is a law called Chapter 123 which requires the market value needed to be 15%+ lower than the assessed value to qualify for an appeal. In a year of a revaluation, however, this does not apply as the ratio is at 100%. Therefore, you can file an appeal if you think your home is worth, say for example, only 7% lower than the new assessed value.
There are some important dates to note if you want to file an appeal. The first is the window in which you must file an appeal: Jan. 1 to May 1. Since this is a revaluation year, the deadline has been extended to May 1. The effective date of valuation of the subject property is October 1, 2018. It is ideal to use comparable sales that have sold close to that date—not after it—to determine the fair market value.
Here’s a helpful tip for homeowners who want to appeal on their own. Don’t compare your taxes to your neighbors. That’s not how the process works, and you will not get any results that way. You need to prove a fair market value below the new assessed value using the best comparable sales available.
To ensure you will present a strong case, hire an expert who has experience at hearings and knows Westfield well. When hiring an appraiser, make sure he or she knows the market well for this Westfield revaluation. Does the appraiser know the different neighborhoods like Wychwood, Indian Forest, and The Gardens, or school districts like Wilson, Jefferson, and Tamaques to name a few?
If you are successful in the tax appeal with the Westfield revaluation, the town will credit the difference between the overage you paid in the first two quarters of 2019. The quarterly tax bill will go back to being averaged out with the lowered tax amount over the four quarters for 2020.
There are some smart realtors who have noted on their listing comments that taxes are subject to change. I have seen properties that have been under-assessed and show low taxes. This is likely to change and could significantly affect the monthly payment.
As a current resident of Westfield, someone who has lived and worked in this area since 2005 and has had a very strong track record of winning tax appeals, I know this market and understand the revaluation process. In fact, last year we saved our clients hundreds of thousands of dollars in annual residential real estate taxes.
Let us know if we can help you lower your real estate taxes, too. Call us at 908-233-1337 for tax appeals as well as any of your real estate appraisal needs.
Market value – The current value of your home if it were on the open market in a transaction between a willing buyer and a seller not under duress.
Assessed value – The value given for a particular property from the town as of the last town valuation. This number is typically broken down with a land and improvement value and is used to determine property taxes.
Ratio –The town uses an average ratio which is a fractional relationship to the assessed value to calculate what they believe to be the property’s true market value. This number changes on an annual basis.
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