Property tax appeal filing season has suddenly arrived. The extent of the COVID-19 pandemic on real estate appraisals remains unclear, and many landlords may not even have begun to focus on how it has affected their property appraisals.
The sectoral impact of the pandemic
Certain types of goods seem to have been unquestionably negatively impacted by the pandemic. Topping the list are retail and hospitality properties, including restaurants. The office property segment follows these asset classes closely, as the amount and format of office space required by tenants in the “new normal” will, in many ways, be fundamentally different. There could also be a shift in the multi-family residential market with the advent of how and where people will choose to live after experiencing the health consequences of the pandemic in our densely populated metropolitan area.
At the other end of the spectrum, there are certain types of property whose valuations have actually been boosted by the consequences of the pandemic. Warehouses and distribution centers will likely continue to see renewed market appreciation, as they did before the pandemic. It is important to note that this substantial market appreciation may make these properties vulnerable to ‘reverse tax appeals’ being filed. aggressively by many municipalities seeking to increase the assessments of these properties. In addition, a municipality has the right to file a counterclaim to claim to augment your appraisal if they believe the property is undervalued. Therefore, it is extremely important to properly assess your case before submitting it.
What you need to know this tax appeals filing season
By February 1, 2022, each tax district’s tax assessor will issue an “Assessment Notice” postcard, which lists, among other information, the property assessment for 2022. It is important to understand that unless unless there has been a district-wide reassessment, the “assessed” value is not necessarily the “market value” claimed by the municipality as part of the assessment. Instead, the municipality must defend the “imputed” or “equalized” value of the property, which reflects appraisals in the district are a percentage of the actual market value as judged by the average of all usable sales in the district. This “equalized” value is often higher than the appraisal and is the actual value to be analyzed to determine if the property is appraised fairly.
An appeal of a 2022 assessment must be filed by April 1, 2022. All appeals may initially be made to the County Board of Taxation, but if the assessment (not equalized value) exceeds $1 million , the call must be made. directly to the New Jersey Tax Court. Direct appeals to the Tax Court must also be filed by April 1, 2022. The only exception to the April deadline is if the municipality has conducted a district-wide reassessment or reassessment, in which case the deadline is May 1, 2022.
CSG Law’s Property Tax Group stands ready to address each of these issues, and we welcome the opportunity to assess properties for appeal potential. Our group has successfully handled calls involving regional shopping centers, hotels, casinos, corporate offices, office buildings, multi-family apartment buildings and complexes, industrial properties ranging from warehouses to special purpose properties such as chemical plants, power plants, oil refineries, breweries, reservoirs and recreational properties such as golf courses and amusement parks. Our group also vigorously defends “reverse tax appeals”.
For more information regarding property tax appeals in the current environment, please contact John R. Lloyd, Practice Group Leader, Property Taxation Group (973-530-2098 or [email protected]), Jill Daitch Rosenberg, Member of the Firm (973-530-2102 or [email protected]), or Anthony J. Marchese, Attorney (973-530-2165 or [email protected]).