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Revaluation

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1. What is a Revaluation?

Revaluation is a periodic program undertaken in order to appraise all real property in terms of its full market value (bringing all properties to 100% of their true market value and by the same standard.) Market value is defined as the price a purchaser who is willing but not obligated to buy, would pay an owner, who is willing but not obligated to sell, taking into consideration all uses to which the property is adapted and might in reason be applied. Also known as tax equalization, revaluation ensures that all property owners pay their fair share of taxes based on the actual true market value of the property they own.

It consists of appraising the value of the properties, both taxable and exempt, using recent sales, building costs and income and expense information of similar properties. All residential, commercial, apartments, industrial, vacant land, churches, school buildings and all other real estate are valued.
The property tax is designed as an "ad valorem" tax, which means it is a tax based on the value of the property. The premise is that if someone owns a $1,000,000 property, he or she would pay twice as much in taxes as someone who owns a $500,000 property. Therefore, the market value of property is the standard that is used to determine one's fair share.

2. Why a Revaluation?

The objective of a revaluation is to bring all properties to 100% of their true market value. Property values change at different rates for various locations and property types. A revaluation ensures fairness and equity in the collection of revenue for Municipal purposes. The purpose of a revaluation is to eliminate any assessment inequities that may have developed since the implementation of the previous revaluation. This balances the Municipality's real property tax burden among its taxpayers. In addition to ensuring that the local tax burden is borne equally, being at 100% of value means that property owners will be paying a fairer, more equitable portion of county taxes since no adjustments in the equalization process will have to be made.

Once the revaluation program is completed, the tax rate per $100 of assessed valuation will undoubtedly go down to reflect the increased value of the ratable base. However, this does not necessarily indicate whether the tax on your property will increase or decrease.

Revaluations do not increase the total amount of revenue to be raised by taxation. The municipality only collects the amount of tax dollars that the four units of local government (local school, regional school, county government and municipal government) determine is necessary to operate.

3. What are the benefits of a Revaluation to me as a property tax payer?

Since the time of the last revaluation program, property values have changed. Many properties have improved, some have deteriorated. Over time, different neighborhoods appreciate at different rates. Different types and classes of properties change in value in different ways. The fairness or equity of the property tax depends on whether similar properties are treated alike. If the assessments do not keep pace with property changes and market conditions, inequities creep into the tax list. When that occurs, some property owners may be assessed at more than other with comparable homes and are paying more than their fair share of property taxes, while others are paying less. A revaluation of all properties corrects the inequities and inaccuracies so that each property tax payer is paying his or her fair share.

4. How are the values established?

There are three different methods to estimating market value. The Sales Comparison method compares a property with similar properties that have recently sold in the same or similar neighborhoods. All properties for which there is a sufficient number of reasonably comparable sales will be valued using this method. The Replacement Cost method estimates what it would cost as current, local prices for construction material and labor to replace the building. Depreciation and obsolescence are subtracted to reach a net value for the buildings, and then the value of the land is added to reach a market value for the property. The Capitalization of Income method us used primarily for commercial and apartment properties. This method estimates the predictable net rental income after expenses are deducted that would be generated for the property and then determines the market value on the basis of what a prudent investor would pay for such a property. After reviewing the valuations using the above three approaches where applicable, a final correlated value will be determined to be used as the basis of the assessed value.

5. Why an inspection of properties?

The purpose of the interior inspection is to record information relative to the structure which will affect its value. The information recorded at the time of this inspection will include such items as the type of interior wall construction, number of bathrooms, type of heat, air conditioning other than wall units, percentage of basement and area finished for recreation or apartment use and the percentage of finished half story and attic where applicable.

The exterior inspection includes the measurement of each structure including garages or other accessory buildings, the determination of story height, roof structure, type of foundation and exterior wall construction. The physical condition of the structure is noted to establish depreciation factors for age, use, etc. Topographical features of the land are also noted as they may affect value.

6. Doesn't the town have this information on file?

In many instances, the answer is yes. However, Appraisal Systems was contracted to provide current information based on physical inspections and has no access to any of the existing municipal records.

7. What can I expect during a visit by an inspector?

For starters, when the inspector arrives at your door be sure to ask to see proper identification before allowing admittance to your home. If you have any doubts about the person's identity, refuse entry and call the Police Department for verification. Appraisal Systems will not enter your property unless the owner or an adult representative of the owner is present.

8. How long will an inspection take?

A typical interior inspection lasts fifteen minutes or less.

9. Will I be assessed more for my decorating and/or landscaping?

Your tax assessment will not be greater because the interior of your home is elaborately decorated and furnished. Assessments are based only on the real property and not on your personal belongings. The same holds true for shrubbery and landscaping.

10. What if I am not home?

If unable to gain entrance at the time of the first visit, the field representative will leave a card indicating the date and time when he will return to inspect the premises. Should this date and time be inconvenient you may call the telephone number provided to reschedule. If at the time of the second visit an interior inspection is again no possible, an estimate of the interior structure of the premises will be made by the inspector. This information will be recorded on a card and left for the property owner. An interior inspection is an important component of the revaluation process. If you receive an estimate card, please contact the office to schedule an appointment.

11. Can I refuse entry to the field inspector?

Yes, you may refuse entry to your home, but is in your best interest to see that as much information as possible is gathered to help insure an accurate assessment. If an appraiser cannot inspect the inside of a building, it's possible an inaccurate assessment may result. The law provides that a property can be assessed at the highest reasonable value if the field inspector is denied entry.

The revaluation program should not be seen as an adversarial situation. Property owners have a vested interest in the outcome of the project and their cooperation is vital to achieve an equitable revaluation. If one person's property is under-assessed, all the other property owners in the municipality will pay higher taxes to make up for the discrepancy. Conversely, if property owners deny access to the field inspector they could wind up being over-assessed and pay more than their fair share of taxes.

12. When will your inspectors be in my neighborhood?

Normally, our inspectors follow the tax map pages or neighborhoods delineated by us. For this reason, two houses a block apart may be inspected months apart from each other. Weather also plays a large part of our rate of inspections. For these reasons, we cannot forecast when we will be in any specific area.

13. Can I schedule an appointment in advance?

Because of the large numbers of properties being appraised, specific appointments with property owners are not made until field inspectors have made at least two attempts to gain access. In the event, a card will be left at your door instructing you to call for an appointment. When you call the number on the card, you will be asked for the block and lot of the property, which can be found on the card. Appointments will be available weekdays, evenings and Saturdays in order to accommodate everyone's schedule.

14. My property has unique conditions which affect its value. What should I do?

If your property has a unique condition that influences value, please send documentation to Appraisal Systems, Inc., 266 Harristown Road Suite 302, Glen Rock N.J., 07452 and it will be considered. Also, please send any documented proof relative to floodplains or severe topographical conditions affecting your property. Also, please do not send any original items to us, as we will be unable to return them to you.

15. My home has been inspected. Now what?

The next step is the valuation process. Regardless if when your home was inspected, all notifications of value are mailed out at the same time (approximately). Typically, this occurs in October. For further information on this aspect, please see our Frequently Asked Questions on the Valuation Process.

16. Why do some homeowners pay more taxes after a revaluation and some pay less?

Some increases result from correcting inequities such as improvements to property performed without building permits and therefore not reflected in the assessments prior to the revaluation.

If market values in your area have not risen as much as in other areas, or your property is currently overvalued when compared with the comparable properties, your share of the tax burden would be reduced as a result of revaluation. The assessed vale is only one component in determining tax rate. The other is the amount to be raised in taxation is each government's yearly budget that each of the four government's (local, county, school and regional school) determine to be required to operate. When each year's budget reflects an increase in the amount to be raised regardless if whether a revaluation is implemented, one pays more taxes.

17. When will I be notified of my new assessment?

After all the properties in your town have been inspected, the process of determining value takes place. Appraisal Systems will notify each property owner regarding the preliminary assessment of his or her property. If you have any questions or you disagree with the preliminary valuation, you may schedule an appointment to discuss your concerns with a representative of the company.
These notifications are mailed out at the same approximate time regardless of when your house was inspected. This is generally done in November.

18. What are my neighbors' assessed values?

Until the revaluation is completed and accepted by the municipality and the county, all of the values are kept confidential as they are still works in progress. Once the official tax book is printed by the county, you may visit the assessor's office in the municipal building and review any and all the properties in the town. This will occur by January 10th.

19. Who can I talk to about my value?

An informal interview will be available for property owners who have questions or concerns about the preliminary assessment of their property. The one-on-one interview can be scheduled at a time convenient to the property owner and will take place in Town Hall. You will be provided with a telephone number to call to schedule an interview should one be necessary.

The interview process will be informal and will focus on a discussion of your property. It is important that all of the information presented about your property is accurate. If you feel there are conditions that diminish the market value of your property, the interview is another opportunity to bring those factors to our attention. All appropriate comments will be reviewed and considered to determine if an adjustment is in order.

20. When will I find out the results from my informal hearing?

Once the period for informal interviews has ended, all property owners who held a meeting will receive a notification of outcome. These are all mailed out at the same time regardless of when your interview took place.

21. Is there an official appeal process if I still disagree with my value?

If you are still dissatisfied with the result of your interview, you can file a formal appeal with the Passaic County Board of Taxation after January 1st but prior to April 1st. This step is similar to the informal interview. However, your comments will be heard by a Commissioner of the Board of Taxation. You will be given an opportunity to state the reasons you believe your assessment is inaccurate. After reviewing the facts presented, the Board will render a decision as to whether an adjustment is in order.

In the even you are not satisfied with the decision of the Board of Taxation, you have the right tot file an appeal with the Tax Court of the State of New Jersey. This must be done within 45 days of your notification. This step in the process is formal, taking place in a courtroom setting before a Tax Court Judge.

22. Can I have a copy of my appraisal?

Once the official tax book is printed, you may visit the assessor's office in the municipal building and review any and all of the properties in the town. It is the prerogative of the individual assessor to distribute copies of the data.

23. What is the difference between assessed value and market value?

The assessed value is a percentage of the appraised market value and is used as the basis for determining the property taxes. Market value is the typical price that a willing buyer would pay a willing seller if the property were offered on the open market, and buyer and seller are not related in any way or under any pressure to buy or sell.