Bergen County “Group Homes” Entitled to Tax Exemption

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Up to $1 Million Refund for Non-Profit Providing Integrated Residential Psychiatric Services 

The New Jersey Appellate Division recently reversed a decision by the Tax Court, which had denied tax exemptions under N.J.S.A. 54:4-3.6 for a seven-year period to an organization which provides  communal supportive housing for psychiatric patients.  At issue was whether homes owned by Advanced Housing to provide normalized communal living arrangements for disabled people, who rented the housing, were entitled to an exemption.  The argument centered on whether the affordable housing for people with severe and persistent psychiatric disabilities was an integrated unit with the treatment services that were also provided to both residents and non-residents of the program.

After interpreting N.J.S.A. 54:4-3.6, the Appellate Division determined that the Tax Court judge erred by focusing on whether the supportive services were also provided to residents of other housing.  The Appellate Division reasoned that all of the residents in fact participated in the services offered, which were integral to their ability to live independently in the housing provided.  The Appellate Division’s ruling means Advance Housing could be refunded up to $1 million paid in taxes from 2002 through 2004 on the 14 properties it owns throughout nine Bergen County towns.

Although tax exemptions are permitted under N.J.S.A. 54:4-3.6, exemptions are rarely granted and successful applicants must strictly comply with the provisions of the statute.  However, as was the situation in this case, the courts have also concluded that the statute should be read reasonably to provide for exemptions where the Legislature clearly intended them to be applied.

A copy of the New Jersey Appellate Division’s opinion in Advanced Housing v. Twp of Teaneck, __ N.J. Super. __ (App. Div. 2011), can be found here.

For news coverage on this story, please see the following article from the NorthJersey.com by Allison Pries:

Court says Bergen County operator of housing, services for disabled deserves property tax exemption

For more discussion on property tax exemption cases, please see the following blog posts:

Property Tax Exemption Denied to West Windsor Non-Profit

Tax Exemption does not require “lawful use” under zoning ordinance

Property Owner Keeps Tax Abatement After Municipality Failed to “Turn Square Corners”

Newark Church Denied Property Tax Exemption

Hospital’s Off-Site Physical Therapy Center Granted Property Tax Exemption

NJ Courts Deny Property Tax Exemption

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.