The property revaluation Jersey City homeowners were expecting to begin Nov. 1 probably won’t get underway until the beginning of next year, according to city spokesperson Jennifer Morrill.
Incorrect information on the city Tax Assessor’s website states the data collection by private inspectors was supposed to start this coming Monday. However, Morrill said the data collection will be delayed for another few months since a request for proposal (RFP) to solicit the inspection company will not be sent out for at least a few weeks.
The revaluation is an appraisal of each property to determine its current market value. The purpose is to make sure each property owner pays their fair share of the municipal tax levy, and a property owner’s tax bill is determined by applying the tax rate to newly appraised value.
“I first heard about it, it was an indication that Mayor Jerramiah Healy is desperate.” – Vincent Pantozzi
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Mayor Jerramiah Healy sent a letter to the Hudson County Board of Taxation on March 26 requesting that the board order a tax revaluation. Since the city has not revalued property since 1988, and property values have risen since then, despite the loss in value following the 2008 housing market bust most people will find that their homes are worth more.
That doesn’t necessarily mean their taxes will rise, however. Because the entire city’s taxable base of properties will rise in value, the city should be able to lower the tax rate to raise the same amount of tax revenues for municipal purposes. City officials have predicted about one third of taxpayers will pay more; one third will pay less, and third won’t see any change in their tax bill at all.
But in a city that this year had an $80 million budget deficit, and where taxes have skyrocketed over the past five years, residents are worried that a revaluation will lead to even higher taxes.
Currently, the city’s municipal tax rate is $35.68 per $1,000 of assessed property value. That means if you own a home assessed at $100,000 for taxation, you pay $3,568 per year in municipal taxes, not counting school and county taxes. Compare that with the municipal rate of $19.30 per $1,000 in 2005, the first year of Healy’s time in office. That’s an 84 percent increase in the municipal tax rate in the past five years, a fact that has been played up in recent weeks by residents who are gathering signatures for a recall of the mayor and some city council members.
The revaluation process
When a municipality carries out a revaluation, the first step by state law is that the city’s tax assessor conducts a sales study to see if assessments are consistent with each other and submits it to the state. If there is not much evidence of uniformity in the study carried out by the tax assessor, then the revaluation takes place. Next, the city notifies the public that a revaluation will occur.
A private company is hired to inspect properties, including private homes, commercial and industrial buildings, and gather data on which the revaluation will be based. This process is scheduled to run through April 2012. The inspectors are required to try three times to get access to properties to conduct a first-hand evaluation. Otherwise, the value of the property may be subject to an estimate. Usually, the inspector will leave information so a property owner can schedule an inspection if they wish.
Then a second company studies the data in order to reach a new appraisal of each property. Part of this is an analysis of all recent property sales in each neighborhood, emphasizing sales that occur within one year of October 1st of the year the reval is being conducted. That sale data is also used to prepare the appraisals for certain types of properties in a neighborhood.
As for the inspections themselves, city spokesperson Morrill said the plan is for inspectors to be “spread throughout the city’s wards to get the overall feedback on the revaluation process and be ready to address any ensuing challenges.” Morrill also promised that the city’s website will be updated daily as to the areas that private inspectors will visit.
The appraisal process will take about 18 months. Various factors are considered, including the size of the property and building and the cost of any recent renovations.
Once values of properties been determined by the revaluation firm, the city’s Tax Assessor will conduct a review, and either approve the values, or modify them – whether it is an increase or decrease. After the review and modification are completed, the revaluation firm mails a notification letter to each property owner in the city to inform them of the new assessment, or value of the property. The new assessed valuation of the property that will be applied to tax bills starting on Jan. 1, 2013.
If property owners disagree with the assessment, they can appeal the assessment, but not their tax bill, to the Hudson County Board of Taxation. A successful appeal should result in an adjusted tax bill.
The municipal tax rate will be adjusted when the revaluation is done.
They are concerned
Residents and realtors each have a different take on how the revaluation will impact the city. Eileen Chmiel is a retired Jersey City schoolteacher who has owned her home in the city’s Greenville section since the early 1970s. Chmiel remembered paying a $900 yearly tax bill when the house was first purchased. Now, she pays $7,800 a year.
And she is worried that the bill will only go higher when the revaluation is completed since she did renovation work on her home. While Chmiel plans to stay in Jersey City even after the revaluation, she doesn’t think her neighbors will stick around.
“I have a friend whose son lives out of town, and she may go out there and live with him if taxes go up because of the revaluation,” Chmiel said.
Vincent Pantozzi, who owns a four-family home near Journal Square, said he had to renovate almost the entire house and is resigned to an inevitable future tax increase once inspectors see his home. Pantozzi pays over $9,000 a year in taxes.
“When I first heard about it, it was an indication that Mayor Jerramiah Healy is desperate,” Pantozzi said. “That the city is looking for another way, another source to raise taxes.”
Laura Skolar owns a one-family house in the city’s Heights section, for which she pays $9,800 in taxes and is a licensed realtor at Century 21 Plaza Realty in Jersey City.
She already sees the effect of the revaluation from the POV of both homeowner and home seller.
“People do bring it up as a concern when I am selling a house to them,” Skolar said. “However, I have to emphasize the positives, such as interest rates that are at an all-time low and property values have decreased considerably since their height in 2006.”
Phil Rivo is a real estate agent who lives in a brownstone near Hamilton Park in downtown Jersey City with his wife and two children. Rivo said the revaluation is “long overdue” since it will bring assessments of homes within the same range.
“You have people who own homes in downtown Jersey City valued at $800,000 or more but are paying far less in taxes than they should based on the value of their home,” Rivo said.
Rivo did agree with Skolar that the impending revaluation is the “great unknown” that can make it difficult to interest people in buying homes since they don’t know if the assessment on their homes will change leading to higher taxes.
Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com.