June 15, 2020

MSW Q&A Series – Part 4: Property Tax Appeals in the Era of COVID-19

In Part 4 of this 4-part series, Thomas S. Dolan, Esq. answers questions related to navigating New Jersey’s property tax appeal process during the COVID-19 crisis. As part of the Property Tax Appeal practice group at Murphy Schiller & Wilkes LLP (MSW), Tom represents a wide-range of clients in connection with property tax-related matters throughout New Jersey.

Q1: What effect has COVID-19 had on filing deadlines for Property Tax appeals in New Jersey?

The COVID-19 crisis has led to significant extensions to the tax appeal filing deadlines in New Jersey, providing taxpayers with additional time to file an appeal. In every other year, the strict deadline for filing a property tax appeal is either April 1 or May 1 for municipalities that have undergone a revaluation. This year, these deadlines have been extended twice due to COVID-19. As a result, the current tax appeal filing deadline for appeals is July 1, 2020, pursuant to legislation recently signed by Governor Murphy (A-4157). This will likely be the final extension of the filing deadline. We continue to get calls from taxpayers looking to appeal or challenge a tax increase. The good news is that there is still time to file this year.

Q2. Are tax appeals still being prosecuted during this time?

Cases filed in the Tax Court have generally not been delayed by the COVID-19 court closures. Tax Court Judges continue to hear motions and conference cases through video and telephone conferencing.

In contrast, cases before the County Boards of Taxation have been delayed as the County Boards have been closed to the public during this time. In a typical year, most cases filed at the County Board are heard from May through the end of July. This year, cases are delayed awaiting reopening of the County Boards. As a result, recent legislation has been passed extending the time for County Boards of Taxation to render decisions to September 30, 2020. Some counties, such as Union County, have begun to schedule video conference hearings, and we expect other counties to do start to do the same.

Despite the closures, tax assessors have been readily available to discuss resolution of tax appeals during this time. We have been able to resolve many appeals as both sides are eager to have cases ready when the County Boards open up again.

Q3: How will the economic effect of COVID-19 impact tax assessments and appeals?

Under New Jersey law, tax assessments must be based on the fair market value of the property as of October 1 of the pre-tax year. Although the economic impact of COVID-19 on the commercial real estate market is not yet fully know, it is generally expected that the market will soften and property values may decrease as a result of the crisis. Rental streams have been impacted for 2020, and vacancy rates will likely increase as businesses have shut down and are unable to pay rent. Further, new developments scheduled to be completed this year have been delayed and, once completed, may find it difficult to attract tenants, in particular for multi-family or retail spaces.  As a result, it is anticipated that many properties will be over-assessed by the end of the year and into 2021. Further, as municipalities are experiencing revenue shortfalls during this time, we may see municipalities seek to increase revenue through property taxation, further burdening taxpayers.

Q4: How can the attorneys at MSW assist taxpayers during this time?

One important way to mitigate the economic effects of any market downturn and resulting reduction in property value is to reduce your tax burden by filing a tax appeal challenging the assessment of your property. While COVID-19 may have a larger impact on assessments for 2021, it is important to determine early whether you may benefit from an appeal this year or the next. Our experienced tax appeal team can assist by providing a complementary evaluation of your property to determine if it is eligible for a tax appeal and recommend a strategy going forward.

For more information, please feel free to contact:
Thomas S. Dolan, Esq.
(973) 705-7412

tdolan@murphyllp.com

Murphy Schiller & Wilkes LLP (MSW) is a boutique law firm servicing the commercial real estate and construction industries. Headquartered in Newark, New Jersey, the firm services the commercial real estate and construction industries. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.