Hurricane Sandy caused billions in damage, and property owners — both businesses and homeowners — have until Jan. 10 to alert their municipal tax assessor if they want a reduced property assessment, which potentially could lower their property tax bills.
While that Jan. 10 statutory deadline remains in force, legislation has been proposed in Trenton to give hard-pressed Sandy survivors more time. A-3633, sponsored by Assemblyman Ronald S. Dancer (R-Cream Ridge), permits the reassessment of property in cases where the "municipal assessor has not received notice of material depreciation" from the property owner, and allows the state Division of Taxation "to extend certain statutory dates."
But while that bill is under consideration, the current Jan. 10 deadline remains the law in New Jersey — and businesses and homeowners should send a notice to their tax assessor if they believe their property has declined in value, said attorney David B. Wolfe, of Skoloff & Wolfe, in Livingston. Because the law requires notification before Jan. 10, Wolfe said a taxpayer must provide notice to the assessors Jan. 9 at the latest.
Wolfe said he is concerned many property owners are preoccupied with Sandy cleanup and repairs, and may miss the Jan. 10 deadline — or be unaware they must take action.
"We have many clients who suffered some level of damage during Sandy. There were retail centers that were damaged, apartment buildings. Many businesses suffered damage, and frankly the issue of property taxes isn't first and foremost on their minds, because they are struggling to figure out how they are going to survive," he said.
Wolfe said some tax assessors are proactively reducing property valuations, and not waiting for the owners to send them a notice. But he said some assessors will not reduce assessment unless they get the notice. Unless the Legislature extends the deadline, property owners who miss the Jan. 10 deadline won't be able to get a lower assessment for 2013, when the property value will be based on the condition of their property on Oct. 1, 2012; those who miss the deadline may have to wait until 2014 to get a lower assessment.
Bill Dressel, executive director of the New Jersey State League of Municipalities, said municipalities expect a flood of property tax reassessment requests in the wake of Sandy.
"We are seeking further guidance (from Trenton) as to how the communities can deal with this avalanche of tax appeals and property evaluation adjustments. It is going to have a tremendous impact on municipal budgets," he said.
Wolfe said the notice requirement is easy to comply with: "It is simply to send a letter to the assessor saying they experienced damage. That shifts the burden to the assessor to calculate what the value of the property is after Sandy."
He said all the property owner needs to do "is provide this written notice and see what kind of relief they are going to get from the assessor." It's helpful for property owners to be detailed, he said: "If they have an estimate that it is going to cost $400,000 to repair the property, that would be helpful for the assessor."
Wolfe said individual properties damaged by Sandy will have a lower value, and property values overall in Sandy-struck areas may decline because of the storm damage risk. "There is a potential that some people may not want to pay as much for property that (is) potentially vulnerable to this type of flooding."
But, he added, "as a business owner, you can't take the chance that your property is going to be reduced without providing this notice."