As New Jerseyans dig out from the devastation of Hurricane Sandy, the last thing on their minds may be next year’s property taxes. But unless a property owner notifies the assessor before January 10, 2013 that his or her property has been damaged, destroyed or “materially depreciated” by the storm, next year’s taxes could be based upon the pre-Hurricane Sandy condition of the property rather than its present damaged or destroyed value.
New Jersey property taxes are based upon the property’s value on October 1 preceding the tax year. For 2013, the value is determined as of October 1, 2012. There is an important exception to this general rule: when there is material depreciation after October 1 but before January 1 and the assessor receives notice of this depreciation before January 10, the assessor must value the property as of January 1, 2013. If your property has lost significant value between October 1 and January 1, the different valuation date is critical.
If the property owner fails to notify the assessor of the damage or material depreciation, then the assessor is not obligated to consider it when assessing the property for next year. Case law makes it clear that the notice must be given to the assessor, and that the awareness of the damage or depreciation by other municipal officials does not satisfy the statute’s requirement.
Property owners whose properties have been materially damaged by Hurricane Sandy should take advantage of this limited exception to the October 1 valuation requirement. If they do not formally notify the assessor before January 10, however, this tax break will be gone with the wind.
We extend our sympathies to those who have been impacted by the storm. We would be happy to answer any questions you may have about property tax reductions due to storm damage. You should also bear in mind that even if an assessment is reduced because of storm damage, a property owner still has the right to file a tax appeal if he or she does not agree with the amount of the reduction.
Upon request, we can send you a form that you can use to request a reduction in your property tax assessment if it qualifies.
The author wishes to thank Jeffrey Lewis, Esq. of McKirdy & Riskin, PA for his assistance in preparing this blog post.