Taxes seems to be the bad four-letter word in real estate (I know it’s five letters). Regardless if we’re talking with a homeowner in, say, Glen Ridge, Montclair, Maplewood, South Orange or West Orange, my real estate partner and husband Bob Meaux and I inevitably have a moment when we are going to hear, “the taxes here are high.”

This solidified for us that it doesn’t matter where a homeowner lives in the area, he feels his taxes are the worst. The fact is, taxes have become more of a stickler every year even though our home prices are lower than what they were at the height of the market. We cannot stomach the see-saw effect: home prices go down, taxes go up.

Regardless of taxes, our area is a fantastic place to live with an abundance of opportunities, values and lifestyles to choose from. New Jersey taxes are seen as the highest in the nation. Don’t give the impression to perspective homeowners your town is the worst and highest in the state. If someone is looking to buy a home in this area the taxes in your town are similar to other towns they are probably considering whether its Maplewood NJ homes for sale, West Orange NJ homes for sale or Montclair NJ homes for sale. It doesn’t matter.  They have made the decision to choose this area to live in; you should make the decision to verify your assessment and talk about all the great reasons to live here.

When should you file a tax appeal?

Filing a tax appeal means the homeowner does not feel the tax assessment is accurate and disagrees with the assessment value of his home. You are not appealing your taxes, which are determined based on your tax rate; you are appealing your tax assessment. The tax rate is determined by the dollar amount needed for the town and Essex County to operate. The tax assessment is the total value placed on the property and is used to divide the taxes amongst the owners in the town. A tax appeal focuses on the assessment, not the tax rate. After an assessment is done, you don’t know for sure if your taxes have actually increased until the tax rate is set by the town. For more explanation, read A Guide to Tax Appeal Hearings from the State of New Jersey Treasury Department.

Important Dates and Numbers to Remember When Filing a Tax Appeal:

• April 1/May 1, 2012: File by April 1 (or in the case where a re-assessment has just been completed like in Montclair and South Orange, you have until May 1).
• 3 to 5: Include 3 to 5 comparable sales to support your claim.
• October 1, 2011: All comparable sales must have sold BEFORE October 1, 2011.
• 15%: This is the most important number of all. As stated in the New Jersey state guide, the assessment is reduced only if the ratio of assessed value to true value exceeds the average ratio by 15%.
• Card Numbers: Check your property card in the assessor’s office to make sure all the information is correct. Sometimes errors may exists showing you have more land or rooms than you do.
• $1,000,000: There’s an assumption around if your home is worth less than a million dollars, you can’t file an appeal. That’s a myth.

I like the calculation explanation in this old article in The Star Ledger.

“The heart of the matter is that you must be able to prove that your home’s current assessment is at least 15% greater than its market value,” said Mark Bigos, an attorney who specializes in tax appeals. “To make your case you must compile market data of similar properties, in similar neighborhoods, of similar size and preferably style, that have sold for a lower price than your subject property.”

If you are planning to sell your home this year, definitely determine now if you should file a tax appeal and, if you do, use it as part of your marketing. You can either use an attorney like Mark Bigos or do it yourself and contact a REALTOR® like Bob Meaux for comparables. Some people even have tax appeal parties where neighbors come together and get everything done at one time. Once an appeal is filed, many times you will receive notification of your appeal results in the mail without a need for a hearing.

Do not confuse tax assessment value with market value when you think of selling your home. The two numbers are not always aligned and a good REALTOR® acting as your listing agent will know how to determine the difference and promote it as such.

This mild winter has produced continued real estate sales. Home buyers have chosen this area as a great place to live, taxes and all.

This is also on Patch.com.