Princeton Borough and Princeton Township are about to undergo a revaluation of the real estate within their municipalities. Such a revaluation is a mass appraisal of all real property within their borders. It is performed by an independent professional appraisal or revaluation firm. The properties will be revalued at their “current” value. In the Princetons, this will be as of October 1, 2009 and those values, once confirmed, will become effective in 2010. By doing this, the municipalities seek to cause the tax burden to be fairly shared by the properties, based on new tax assessments resulting from the current true values.
Frequently, a municipality makes a determination to undergo a revaluation of the real estate within its borders when the individual assessment – sales ratios vary widely within the 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%. If these percentages vary widely within a municipality, the municipality may determine it is time for a revaluation of all its properties.
Revaluation firms used for this process must meet certain qualification requirements of the New Jersey Division of Taxation in order to be approved by a municipality. In the Princetons’ case, both municipalities have selected Appraisal Systems, Inc.
The valuations of properties must be done in accordance with state law – N.J.S.A. 54:4-1 et seq. If property is under construction (either new construction, or additions or remodeling) then the selected appraiser must determine the extent of completion as well as the value . If the land is assessed as farmland, a valuation will be made based on its value as farmland and then a separate one based on the highest and best use to which the land may be used. Revaluation firms will also value exempt properties as if they were fully taxable.
For every property, the revaluation appraiser will create 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 into the premises is not possible, the valuation will be an estimated one. Once the valuations are made and the proposed valuation supplied to the taxpayer, each taxpayer will be provided with an opportunity to attend an individual informal review of the value proposed with representatives of the company performing the revaluation. At that time, the revaluation firm may consider revisions to their proposed valuation based on input from the taxpayer.
Once the revaluation is completed and new property assessments are made by the tax assessor, a new municipal tax rate will be determined and taxpayers will then know to what extent, if any, their taxes will adjust as a result of their new assessment.