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Understanding the Real Estate Reassessment Process in New Jersey

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              The reassessment of real estate is a crucial process under the New Jersey Constitution, ensuring that property values remain equitable and reflect current market conditions. Specifically, Article VIII, Section 1, Paragraph 1 of the New Jersey Constitution requires that all real property be assessed for taxation “under general laws and by uniform rules” based on true value. This provision ensures that property assessments remain fair and equitable, preventing disparities in taxation.

              While the Constitution mandates uniform assessment, the specific procedures for reassessment and revaluation are governed by state laws and regulations, including oversight by the New Jersey Division of Taxation and county boards of taxation.

What is the Reassessment Process?

              Real estate reassessment in New Jersey is a systematic process conducted by municipal tax assessors to adjust property values to align with the current market conditions. The goal is to ensure that all properties within a jurisdiction are assessed fairly and equitably, thereby distributing the tax burden appropriately among property owners.

              The reassessment process involves:

  • Data Collection: Inspecting properties and reviewing relevant data such as recent sales, property improvements, and neighborhood trends.
  • Market Analysis: Comparing similar properties to determine accurate and fair market values.
  • Adjustment of Property Values: Updating assessments to reflect changes in market conditions, ensuring a fair tax distribution.
  • Notification to Property Owners: Property owners are informed of their new assessments and given an opportunity to review or challenge them.

How Often is Reassessment Done?

              There is no set statewide schedule for reassessment in New Jersey. The frequency of reassessment varies by municipality and is determined by local conditions and the need to maintain tax equity. However, reassessments typically occur when:

              A municipality determines that assessed values no longer reflect true market conditions.

              A significant disparity exists between assessed values and market values.

              There is an order from the county board of taxation or the State Director of Taxation due to unequal property tax distributions.

              While some municipalities conduct reassessments annually, others may only do so every few years, depending on market fluctuations and local government decisions.

Is Reassessment Mandatory?

              Reassessment is not automatically mandatory across all municipalities in New Jersey. However, state law requires municipalities to maintain fair and uniform property assessments. If a municipality fails to do so, it may be compelled to reassess properties by the county board of taxation or the State of New Jersey.

              Additionally, if a municipality’s tax ratio (the ratio of assessed values to true market values) deviates significantly from the state-mandated level, reassessment or revaluation may become necessary to correct the imbalance.

Purpose of Reassessment

              The primary purpose of reassessment is to ensure fairness and uniformity in property taxation. Key objectives include:

  • Equitable Tax Distribution: Ensuring that all property owners pay their fair share of taxes based on accurate property values.
  • Reflecting Market Conditions: Updating property assessments to align with current market values and economic trends.
  • Preventing Tax Disparities: Reducing tax imbalances that may arise due to outdated assessments.
  • Compliance with Legal Standards: Meeting constitutional and statutory requirements for property tax administration.

How Was The Haddon Township Tax Reassessment Scheduled?

              In April 2022, the Camden County Board of Taxation ordered Haddon Township to conduct a district-wide property revaluation to be completed in 2023 and implemented for the 2024 tax year. This order was approved by John Ficara, Acting Director of the Division of Taxation. Subsequently, in May 2022, the Board granted Haddon Township a one-year extension, adjusting the completion to 2024 and implementation to the 2025 tax year. camdencounty.com  The revaluation was completion in 2024, with the new assessments taking effect in the 2025 tax year.

Conclusion

              The real estate reassessment process in New Jersey plays a vital role in maintaining fair property taxation. While not mandated on a fixed schedule, municipalities must conduct reassessments as needed to uphold tax equity. Property owners should stay informed about reassessment practices in their area and understand how changes in property value can impact their tax obligations.

The NAR Settlement – Another Perspective

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There is a lot of available information explaining the recent NAR settlement effecting the residential home buying process. Many of the explanations have been offered by brokerages, social media from those in the industry, and state or local realtor estate associations. I found the explanation offered by Tanya Monestier a contract Law Professor from Buffalo, New York, or in other words, someone without “skin in the game,” to be a neutral explanation providing good advice. As with anything these days, there is a lot of information available, as well as misinformation. It’s quite simple actually…you simply need to understand what you are signing and negotiate the best deal that works for you. As always, Bergmann Law is here to help with your real estate questions.

Click to access monestier-sellers-guide.pdf

The Worst-Case Scenario Squad

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Here at Bergmann Law when a client asks us a question, we play the truth teller. So which question is the most common and probably the most difficult to answer?

What is the worst-case scenario?

It’s our job to know the worst-case scenario and clients who call us with business or property problems are ready for the difficult conversation as we go through all of the possible outcomes, including the dreaded ones.

However, for a client who is at a high point in their life or career it can be much more difficult. For instance, having to explain to a Buyer who has found their dream home with the perfect kitchen that they should really investigate the water issues in the basement before they purchase can be an uphill battle.

But perhaps the most important area, and often most difficult, is in estate matters. The most common answer we get when we ask a client if they have estate documents whether they are a Buyer purchasing a home, someone starting a business, or even a parent with young kids is: “no, I don’t need them, my family knows what I want.”

That’s when we know we need to be the worst-case scenario squad to someone who is only thinking about the best of life.

For most of our clients the worst-case scenario is the event just before the question “did they have a will?” or “do you have a medical power of attorney?” But in reality, the worst-case scenario only gets worse when the answer is “no.”

First, even if you are young and have only a few assets, basic estate documents are especially important if you and your partner are not married or if you’d prefer a sibling to make decisions rather than a parent etc. Official documents are required for the person of your choice to be considered your next of kin to get information and to make healthcare decisions on your behalf. It doesn’t matter if you’ve been with your partner for a decade and only speak to your mom on her birthday, the state and the doctors will select your mother as next of kin.

Second, if you do have assets and financial responsibilities, even if your family knows what you want and only intends to follow your wishes, they still have to deal with logistical realities that will be made far simpler if you execute estate documents. Those documents show the state, your banks, your landlord, your business partner, your wishes. If you leave your family with no formal will documents, they will have a more complicated estate process to deal with even as they proceed with what you told them in an email or over dinner years ago and estate documents give your family the power needed to do what you have asked.

In spite of the confidence you may have in your family to know what you want, the reality we see most often is families who disagree over their understanding of what you want. We don’t imagine many families sit around the dinner table on Thanksgiving clarifying all aspects of when a ventilator should be turned off or why your bank savings should go to your nephew because you want your niece to get your jewelry. This is especially true in situations of a surprise death or injury that no one in the family could have predicted. Having these documents gives everyone clear direction rather than leaving families to guess what treatments you would have approved or who should get your favorite necklace. We always assure clients these documents relieve pressure and responsibility rather than adding to it during a difficult time. We understand it’s difficult to have to live in the worst-case scenario world, even for a little while, but even if you don’t feel it’s worth it for you, it will help your family and friends. 

So, while we know it’s the last thing on many of our clients’ minds, the worst-case scenario squad is here when you need us. Give us a call.