Real Estate Tax Appeal: Key Differences from Eminent Domain

The real estate tax appeal process can ultimately lead to reduced tax burdens for New Jersey property owners…that is the good news, and our firm specializes in representing property owners across N.J. in those types of cases. However, unique situations may arise during a tax appeal that can pose a dilemma for owners. One such situation is if a property owner is confronted with a potential taking of the property by eminent domain while a tax appeal is pending.

Tax Appeals

In New Jersey, and several other northeastern states, the “value-based” or “ad valorem” approach is applied to calculate real estate taxes. This method involves an annual evaluation of all real properties by the local tax assessor. The assessment is either grounded in the market value -what a well-informed buyer would willingly pay a well-informed seller in a real sale. Or on an equalized value by applying a ratio to the assessment to mirror the current market value.

Upon calculating an assessment, the property tax bill is then computed by multiplying the assessment with the local tax rate, which is influenced by various elements including county, municipal, and school budget costs. If property owners find themselves bear the brunt of a high tax burden, there’s an avenue for relief. Instituting a real estate tax appeal with the local county board of taxation or even the New Jersey Tax Court, against the assessment, offers a possible route towards a reduced tax load.

Launching a successful real estate tax appeal requires more than just a mere disagreement with the assessment. It obliges applicants to provide ample evidence questioning the trustworthiness and precision of the fundamental assessment, thus demonstrating their property’s genuine value. With a proper real estate tax appeal, you can challenge your assessment and possibly secure a more equitable tax rate.

Eminent Domain Cases

In the complex world of real estate, property owners often find themselves in the middle of financial conflicts. One of such situations that presents a conflict of interest involves both real estate tax appeal and eminent domain cases.

The delicate nature of a real estate tax appeal can create an intense situation where the property owner is advocating for a lower property value than the assessed value or equalized value. This counterintuitive measure is a strategic approach to questioning the validity of the underlying tax assessment.

Simultaneously, that same property owner might find themselves embroiled in an eminent domain case. This is where the property owner argues for a higher property value than that proposed by the condemnor when advocating for just compensation for the subject property. Juggling these two separate but connected issues can lead to credibility issues for the property owner and the opinions of their valuation experts.

But, juggling these two issues isn’t impossible. It demands for proficient practitioners who can balance the likelihood of success in either case while achieving the greatest benefit to the property owner. Therefore, seeking experienced counsel is pivotal in safeguarding your property rights.

If you believe the assessment of your property is incorrect, or if you’re facing a governmental taking, our experienced tax appeal and eminent domain attorneys at McKirdy, Riskin, Olson & DellaPelle, P.C. are ready to help. Contact us today to commence your real estate tax appeal process or to discuss your eminent domain case.