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Property Tax Assessment Audit - Are You Being Improperly Taxed?

As a general rule, common property should not be separately assessed by your municipality.  However, many associations are paying property taxes on common property as a matter of course, not realizing the property should be assessed at a minimum or no value.  Now is the time to review your tax assessment and determine whether a tax appeal is merited. 

We suggest the following audit procedure:

1. Look Back at 2008:   Was the community being separately assessed for any common property or area in 2008?  Look for any payments to your local tax assessor and determine why the payments were made.  If no payments were made and the Association has not received any tax assessment notices, the Association is most likely being treated fairly.  However, if payments were made, determine which lot and block were subject to the taxes, who owns the lot, and what the lot is being used for.  This information is necessary to determine if the property can be assessed.
2. Be Prepared For 2009:  In late January or early February 2009, you should receive an assessment notice which is generally sent on a small card advising you of your assessment for 2009.   If you do not receive your tax card by the end of February 2009, call your tax assessor and ask for a copy.  You will need to know the tax lot and block for the common property when you call your assessor.  If the notice shows an assessment for common property, you need to do the following: A. Review your governing documents to confirm that the common property is specifically identified as common property or common element, subject to restrictions on use and transfers. B. Confirm your type of association - condominium association or home owners association (HOA).  The basis to challenge the assessment varies depending upon the type of association.   Condominiums have the benefit of a separate New Jersey law that prohibits the taxing of common elements, while HOA’s do not have the benefit of a separate law.  HOA’s must rely upon case law that has been developed over the years. C. If your common property is specifically identified as common property and subject to restrictions, you most likely should not be assessed. D.    Calendar the appeal deadline.  The deadline to file your tax appeal is April 1, 2009. If your town sent out the tax cards late, the deadline may be extended.  You can call your tax assessor to confirm the appeal deadline.   
3. Prepare Your Case Now.  Although April 1, 2009 seems far off, it will sneak up on you quickly.  If your common property was assessed in 2008, it most likely will be assessed in 2009.  Copy your most recent tax bill and send it to your counsel with a copy of the governing documents and a detailed description of the property in question. 

Now is the time to make certain your homeowner associations are only paying their fair share of the tax burden and not being subject to the whim of an aggressive tax assessor.  If you need assistance with a tax appeal, call Timothy P. Duggan, Esquire at 609-895-7353, or email him at tduggan@stark-stark.com.  Mr. Duggan is a shareholder of Stark & Stark and specializes in property tax appeals.

Full post as published by New Jersey Law Blog on February 02, 2009 (boomark / email).