IMPORTANT INFORMATION ABOUT REVALUATIONS IN NEW JERSEY

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IMPORTANT INFORMATION ABOUT
REVALUATIONSIN NEW JERSEY
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WHAT IS A REVALUATION?

• Revaluation is a program undertaken by the
  Township to appraise all Real Estate at its
  estimated Fair Market Value as of October 1st of
  the pretax year.
• Revaluation ensures that all property owners pay
  their fair share of taxes based on the updated
  estimated Fair Market Value
• Revaluation brings ALL properties within a
  municipality to 100 of their estimated Fair
  Market Value.

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• Fair Market Value is the highest price in terms
  of money which a property will bring in a
  competitive and open market under all conditions
  requisite to a fair sale, the buyer and seller,
  each acting prudently, knowledgeably and assuming
  the price is not affected by undue stimulus.
• Implicit in this definition is the consummation
  of a sale as of a specified date and the passing
  of title from seller to buyer under conditions
  whereby
• 1. The buyer and seller are typically motivated.
• 2. Both parties are well informed and each acts
  in what he considers his own best interest.
• 3. A reasonable time is allowed for exposure in
  the open market.
• 4. Payment is made is cash or its equivalent.
• 5. Financing, if any is typical for the property
  type in its locale and is readily available.
• 6. The price is unaffected by special financing
  amounts, services, terms, fees or credits
  incurred.

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WHAT TRIGGERS A REVALUATION?

• The Assessed Values of all properties have
  probably not been updated in many years.
  Because of this the Directors Sales Ratio has
  dropped below the acceptable level of 85 as
  determined by the Division of Taxation.
• The Coefficient of Deviation is elevated above
  the acceptable level of 15 as determined by the
  Division of Taxation.
• There were probably major changes in the
  Municipality regarding
• Neighborhood Characteristics/House styles,
  Zoning, the speed inprocessing of permits, and
• fluctuations in the economy/Real Estate Market.

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WHAT IS THE SALES RATIO, WHO COMPUTES IT AND HOW?

• The Sales Ratio is developed from an ongoing
  study of the relationship between assessed
  values, sales prices and the percentage
  difference between the two.
• This ongoing study is completed by the Division
  of Taxation, and is weighted because it always
  includes the two most current years sales.
  Sampling periods run from July 1st to June 30th.
  
• The purpose of this analysis is to determine the
  efficiency and fairness of the assessments within
  a municipality.

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COMPUTING A SALES RATIO

• ASSESSMENT DIVIDED BY PRICE EQUALS RATIO
• EXAMPLES
• 150,000 DIVIDED BY 300,000
  50
• 200,000 DIVIDED BY 350,000 57

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WESTLAKE SALESJan Jun 2006
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WINDING WAYS SALES Jan Jun 2006
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SOUTH KNOLLS SALESJAN JUN 200638 Sales (all
not shown)This is a sampling of Junes
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JACKSONS SALES RATIO HISTORY
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Jacksons Tax Rate History
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COEFFICIENT OF DEVIATION

• WHAT?
• The Coefficient of Deviation is another
  measurement used by the Division to analyze
  groups of assessment-sales ratios. Each year the
  Division publishes three Coefficients of
  Deviation for each municipality
• General-All properties sampled without regard to
  type.
• Stratified Coefficient Properties sampled by
  property type
• Segmented Coefficient Each property type is
  measured against all others.
• In New Jersey it is generally acceptable to have
  a General Coefficient of Deviation of less than
  15 . Some believe with technology today a lower
  percentage would be achievable.

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JACKSONS HISTORYCOEFFICIENT OF DEVIATION
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HOW IS A REVALUATION ACCOMPLISHED?

• There are several steps in the Revaluation
  process. They are
• Public Relations
• Information gathering (Field Inspections)
• Property Appraisals
• Notification of proposed new Assessment
• Informal Meetings
• Adjustments to proposed Assessments (if any)
• County Tax Board and Municipal approval

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PUBLIC RELATIONS

• Press releases in local Newspapers
• Revaluation Infomational Flyer (available on
  Township webpage and in Assessors Office)
• Talks at Fraternal Organization Mtgs
• Talks at Homeowners Assocation Mtgs

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INFORMATION GATHERINGFIELD INSPECTIONS

• Completed by Field Listers employed by
  Revaluation Firm
• The inspection includes both the interior and
  exterior all all buildings
• Their information is than encoded into a computer
  data base
• You will be asked to sign a Data Sheet

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What does the Field Lister look for?

• Overall Condition
• Exterior dimensions
• How many stories
• Design and Style
• Roof Type material
• Room count
• Basement finish (if any)
• Heat system source
• Central air

• Plumbing fixtures in bathrooms
• Fireplaces
• All types of porches
• Patios and decks
• Inground pools
• Sheds
• Any other detached structures

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WHAT IS NOT INCLUDED ?

• Basketball nets, shrubbery, trees, flowers,
  fences (on residential properties), electric
  garage door openers, location of fire hydrants.

• Interior decorating, drapes, blinds, carpets,
  furniture, clothing, house wares, jewelry,
  televisions and other electronics, cars, boats,
  appliances, gas grills, swing sets, portable (not
  hard wired) hot tubs,

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PROPERTY APPRAISALS

• Appraisers from the firm are analyzing all usable
  sales, making a Sales Map and a Land Value map.
• They gather all information believed to have an
  influence on Real Estate values.
• Apply the principals of the Market Data Approach,
  the Cost Approach and the Income Approach (where
  applicable) in order to arrive at a final
  estimate of value for each property in the
  Municipality.

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NOTIFICATION OF PROPOSED ASSESSMENT

• You will receive a letter in the Fall of the year
  before the Revaluation advising you of the
  proposed Assessment the Firm has arrived at.
• This value should reflect what the property would
  sell for in the Real Estate market of as October
  1st.

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INFORMAL MEETINGS ADJUSTMENTS (IF ANY)

• The Notification letter will list a phone number
  for arranging an informal meeting.
• You should be prepared to support any
  disagreement with the proposed value by providing
  information such as comparable sales or possibly
  a recent appraisal report.
• A recent sale price of a property COULD support a
  view as to value, if it meets the definition of
  Fair Market Value.

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COUNTY AND MUNICIPAL APPROVAL

• Before the Revaluation figures are adopted, they
  must first be approved by
  
• The local Municipal Assessor (who will certify
  the numbers on January 10th).
• The Ocean County Board of Taxation
• Special Note The work of the Tax Assessor is
  not supervised by the Township therefore the
  Mayor and Council cannot intervene in this
  process.

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THE EFFECT OF A REVALUATION ON THE MUNICIPALITY
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FREQUENTLY ASKED QUESTIONS

• What if I do not plan to sell my home?
• It doesnt matter, Every property must, by Law,
  be revalued.
• Will all property values increase the same?
• No. All properties do not increase in value at
  the same rate. Part of what a Revaluation does
  is redistribute the tax burden.

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• How does the Revaluation affect my taxes?
• When there is Revaluation, the tax rate changes
  in contrast to the increase or decrease in the
  value of the Municipality.
• If the Tax Rate drops, shouldnt my taxes go
  down?
• Not necessarily. As a result of the tax
  equalization process, some will go down, some
  will remain about the same, and some will
  increase.

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With an increase in property values, will the
levels of Government collect more Taxes?

• No REVALUATIONS DO NOT BRING IN ADDITIONAL TAXES,
  they just redistribute the overall Tax burden
  among the properties within a municipality.

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TAXES AND REVALUATION TRUE OR FALSE ?

• Your assessment will be greater if you have the
  interior of your home nicely decorated and
  furnished.
• FALSE Assessments are based on REAL property,
  not your personal belongings or tastes.

• Your assessment will be greater if you have your
  property nicely landscaped.
• FALSE Plantings and manicured lawns are deemed
  not to be permanent in nature and are not
  assessed.

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TAXES AND REVALUATION TRUE OR FALSE ?

• Revaluations increase the amount of revenue
  collected as taxes.
• FALSE The municipality collects only what is
  necessary to run each level of government in each
  years budget.

• Assessments change every time the property sells.
• FALSE Per State Law, assessments can only
  change when the property has been improved or
  demised or when a complete Revaluation is done.

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TAXES AND REVALUATION TRUE OR FALSE ?

• If I dont let the Field Lister into my house, it
  will benefit me.
• FALSE If entry is refused, the Assessor has the
  right to assess the property at the highest
  possible value.

• If I dont agree with the amount of my TAXES,
  I can appeal them.
• FALSE Under State Law, TAXES cannot be
  appealed, however an aggrieved taxpayer can
  appeal the
• ASSESSMENT

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WHAT ABOUT APPEALS ?

• The first thing to happen will be receipt of the
  Chapter 75 Notification of Assessment which you
  receive around February 1st of each year.
• The card explains that you should see your
  Assessor with any questions with regard to your
  Tax Assessment.
• If after the new assessments are certified by the
  Tax Assessor you still dont agree with your
  ASSESSMENT, you may file an Appeal with the
  County Tax Board.

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WHAT ABOUT APPEALS ? Contd

• On the reverse side of the postcard are
  instructions on how to get an Appeal Form from
  the County Tax Board.
• Follow all instructions, dont forget to serve
  your Assessor and your Municipal Clerk with a
  copy of the Appeal.
• The deadline for filing is APRIL 1ST.

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WHAT ABOUT APPEALS ? Contd

• A hearing will be scheduled by the County Tax
  Board, usually prior to June 30th.
• Judgments are mailed after the hearing date.
• If you agree with your Judgment, your Assessor
  will adjust your Assessment (or not if no change
  was made by the County) and the Tax Collector
  will recompute your taxes.

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WHAT ABOUT APPEALS ?Contd

• If you disagree with the Judgment of the County
  Tax Board you have 45 days from the mailing date
  of the Judgment to file with the Tax Court of New
  Jersey.
• AT THIS TIME I WILL ANSWER
  ANY QUESTIONS.