As residents of Princeton Borough and Princeton Township are well aware, their municipalities have undertaken a revaluation of the real estate within their boundaries for tax assessment purposes. The last revaluation performed in Princeton Borough and Township was in 1996. Recently, each municipality notified property owners by first class mail of their preliminary assessments. The preliminary values were established by Appraisal Systems, Inc., an independent professional appraisal firm hired by the Princetons to perform their revaluations. The date of the property revaluation is as of October 1, 2009. These new values, once confirmed, will become a property’s new assessment, effective with the 2010 tax year.
The purpose of the revaluation is to cause the tax burden to be more fairly shared by the properties, based on new tax assessments resulting from current true values of properties.
The Mercer County Board of Taxation ordered the Princetons to undergo a revaluation of the real estate within their borders when the individual assessment – sales ratios varied too widely within each municipality. This ratio is determined by dividing the assessed value of a property by an accurate sales price, with the result being a percentage. For example, if a property is assessed at $100,000 and sold for $200,000, the assessment sales ratio is 50%. By 2008, these percentages were 40% in the Borough and 47% in the Township.
The valuation of properties must be performed in accordance with state law as set forth in N.J.S.A. 54:4-1 et seq. For every property, the revaluation appraiser creates a property record card which contains specific information about the physical attributes of the property (e.g., dimensions, age, condition of any buildings, etc.) and other information which may be of assistance to the appraiser (existing appraisals, recent sales, rent amounts, etc.). The card is created with information obtained based on an actual inspection of the individual premises. If entry onto the premises is not possible, the valuation will be an estimated one.
In the Princetons, the preliminary valuations have now been established and letters notifying taxpayers recently mailed. Each taxpayer will be provided with an opportunity to attend an individual informal review of the value proposed with a representative of Appraisal Systems, Inc. At such time, Appraisal Systems, Inc. may consider revisions to its proposed valuation which may increase or decrease (or result in no change to) the proposed assessment, based on additional input from the taxpayer.
Taxpayers will have until May 1, 2010 to file an appeal with the Mercer County Board of Taxation if they are not satisfied with their new assessment. Thereafter, an appeal can be taken to the State Tax Court within 45 days, with further appeals possible.
Once the revaluation is completed and new property assessments are made by the tax assessor, a new municipal tax rate will be determined. Taxpayers will then know to what extent, if any, their taxes will change due to their new assessment.