Our home, which was over-assessed compared to our more updated neighbors' homes. (Karin Price Mueller | NJ Advance Media for NJ.com)
By Karin Price Mueller | NJ Advance Media for NJ.com
A few months ago, we received a dreaded post card in the mail from the town tax assessor.
As we had feared, our home's assessment went up significantly, jumping $59,000 in one year, from $520,700 to $579,400. And although our town's new tax rates haven't been set yet, we knew the increase wouldn't be pretty.
Add in the recent changes in the new federal tax law limiting property tax deductions and we knew we would take a hit.
Sure, our situation wasn't as dire as some Jersey City homeowners, who are facing big property tax hikes because their last revaluation was nearly 30 years ago. (Most municipalities reassess properties every five to 10 years.)
We didn't want to accept a higher property tax bill without a fight.
We decided to file a property tax appeal.
Here's what we learned.
Our deck with a gazebo is one of the few cosmetic changes made to the home, and that was 13 years ago. (Karin Price Mueller | NJ Advance Media for NJ.com)
Starting the process
Our house sits in a Monmouth County neighborhood that was established in 1986. Our taxes were about $6,700 when we bought the house in 1999.
They've gone up every year since.
Before this new assessment, we were paying $10,757.67.
With three kids, we haven't spent much money on decorative renovations. We chose to live with the original kitchen and older baths in exchange for a new roof, new windows and updated heating and cooling systems.
Our house has great guts, but cosmetically, it leaves a lot to be desired.
Our functional but sorely outdated kitchen. (Karin Price Mueller | NJ Advance Media for NJ.com)
A self-assessment
We have made a few improvements over the years, but no substantial overhaul.
The kitchen hasn't changed except for a new stove, but that's already 15 years old. The hardwood was last refinished in 1999 when we first moved in, and that's when our carpets were installed. Then there's the basement that was never finished, and the chocolate-colored polka-dot original tile in the upstairs bathroom.
We did combine a first floor powder room with a laundry room to make space to add a shower, but that was also 15 years ago.
Our neighbor's beautifully updated kitchen. (Andrea Mesh | Century 21 Mack Morris-Iris Lurie Inc.)
Compared to the neighbors
We knew our neighbors' homes were a heck of a lot more updated.
We couldn't help but notice the perfection of one of our neighbor's homes, where we would feed the cats when they went away. Every room was pristine and newly constructed. The kitchen, the bathrooms, the floors — everything.
They had a pool. We didn't.
They had a finished basement. We didn't.
And their assessment was $576,600 — only a few thousand less than ours.
We do have a bonus 400 sq. ft. family room over the garage that most of our neighbors don't have, but that wasn't enough to balance the scales, we thought.
It was time for the appeal.
Our older second floor bath, complete with original chocolate-colored polka-dotted shower tile. (Karin Price Mueller | NJ Advance Media for NJ.com)
Finding "comps"
Our first step was to call a friend who is a real estate agent. We asked if he would pull some "comps," short for comparables, of similar homes in the neighborhood. We could use those to compare our home's condition and assessment with our neighbors, giving us ammunition for the appeal.
He came through big time. Home after home, it was clear our neighbors spent a lot of money updating, which would mean a higher selling price. While our home had the same amount of space, we estimated it would take a minimum of $75,000 to update the kitchen and baths. Finishing the basement or adding a pool would cost much more.
There was no way our home would sell for the same price as many of our neighbors, so our home should have a lower assessment.
The updated bathroom in a neighbor's home. (Andrea Mesh | Century 21 Mack Morris-Iris Lurie Inc.)
Comparing the numbers
Next, we visited the town's website to look up the assessments for the comps, which gave us the hard evidence we needed for the appeal.
Some of the comps had a lower assessment than ours, even though the homes were substantially updated throughout. Others were about the same, but those also had the pool or finished basement, or both.
We compiled all that information, including photos from recent sales listings for the neighbors' homes and a few photos of our home for good measure, and we were ready to go.
Monmouth County's opening screen for property tax appeals. (Karin Price Mueller | NJ Advance Media for NJ.com)
Filing the appeal
On the town's website, we quickly found the link to enter an online appeal with the county's board of taxation.
It allowed us to create a login and enter the evidence, including photos of neighbors' homes and the supporting assessment data.
In all, it took less than 30 minutes.
Shortly thereafter, we received an online confirmation with a date and time for our hearing before the tax board. A few days later, the town emailed to set up a time and date for an appraiser to come to the house.
Our unfinished basement, messy and used for storage. Yes, a reorganization is on the to-do list. (Karin Price Mueller | NJ Advance Media for NJ.com)
The appraisal
When the two appraisers came, they were in and out in less than 10 minutes.
We emailed the town to see how long it would take for the verdict. Not long, they said, explaining we might be offered a settlement, but if we didn't want to accept or no settlement was offered, we'd have to attend the hearing.
A few days later, we had the offer: a reduction of $22,100.
Not bad, but not enough.
One of the many finished basements in my neighborhood. (Andrea Mesh | Century 21 Mack Morris-Iris Lurie Inc.)
Karin Price Mueller | NJ Advance Media for NJ.com
Getting professional help
We hit the phones — calling as a consumer and not as a newspaper columnist — talking to attorneys who handle tax appeals. We wanted to know if we could do better.
One attorney recommended emailing the town to negotiate. Explain that the home would never sell for that price and suggest a lower amount, he said. He thought we'd have a good shot because the town would want to get some cases off the docket, and we did have some pretty good backup for our case.
Worst case scenario? We could accept and appeal again next year, or go to the hearing for a fight.
Next, we wrote a professional and friendly email explaining that we'd be lucky to sell the home for $515,000 — based on the area's upgraded comps — because it would take a whole lot of cash for a buyer to upgrade the home to match the neighbors.
We asked if the town would consider $515,000 instead, intentionally low-balling a little so we'd have room to negotiate.
The pool in one of our neighbor's yards. We don't have a pool. (Andrea Mesh | Century 21 Mack Morris-Iris Lurie Inc.)
The negotiation
An hour later, we received a response directly from the appraiser.
"I do agree, the comparable sales generally have more updated interiors," she wrote, but she noted we did have that bonus family room over the garage — a fair point.
"In reviewing the sales, my inspection results, and your comments, I am willing to submit a revised settlement offer of $528,800," she wrote.
Bingo! Not perfect, but a $50,600 reduction over where we started, and only $8,100 higher than last year's assessment.
We agreed to the settlement.
The screen that shows the county's settlement offer for a lower assessment on our home. (Karin Price Mueller | NJ Advance Media for NJ.com)
Your homework, and a warning
If you decide to appeal your taxes, you'll have to do some homework.
Ask a real estate agent to pull some comps of similar homes, or look at some of the free real estate sites online. Then you can plug the addresses into your town's system to compare their assessments to yours.
Then Google your county tax board, or find it on your town website under "tax assessor."
If you don't want to go solo, you can always hire an attorney. Some are paid based on what savings they recover for you while others work for a set fee. But this work is really easy to do for yourself.
And beware: not every homeowner has grounds for an appeal. If you fight when you're not deserving of a lower assessment, the appraiser and the tax board could actually decide your assessment should be higher.
Depending on where you live, you may need to wait until next year. Monmouth County's deadline is Jan. 15, but most other municipalities are April 1 or within 45 days of the mailing of the assessment notice. Check yours here, or call your town to be sure.
In the end, even though we cut our assessment by more than $50,000, we don't know our town's tax rates for the next year. Our actual tax bill will probably go up anyway.
Maybe we'll try a new appeal next year. You never know.
Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com's weekly e-newsletter.
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