Yesterday I discussed the impact of disasters like Hurricane Sandy on the appraisal process. If a disaster can change the value of a property for appraisal purposes, it follows that it can also change the value of a property for tax assessment purposes. If a disaster has affected your property to the extent that it would now be assessed at a lower value, what should you do?
Hat tip to the law firm of McKirdy & Riskin in Morristown, whose excellent blog, New Jersey Property Tax Law, provides the answer to this question. Reminding us that New Jersey property taxes are generally based on a property’s value on October 1 of the preceding tax year (thus 28 days before the hurricane), author and firm partner Anthony F. Della Pelle notes the following enormously important exception:
[W]hen 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.
Obviously, it is absolutely imperative that owners of storm damaged or destroyed properties make a formal notification to their tax assessor before January 10, 2013, in order to qualify for this exception to the usual valuation date.
Thanks again to attorney Anthony F. Della Pelle for his concise and straightforward explanation of this rule. Mr. Della Pelle is an expert in eminent domain and real estate tax appeal matters, and is a graduate of Franklin & Marshall like my cousin Jamie as well as Seton Hall Law, where my cousin Amy is a professor and my son Tim’s girlfriend Liz is in her second year, and where there’s a room in the library named after my grandmother Elizabeth McKee Pigott, endowed by my uncle Dick, also a Seton Hall grad (undergraduate and law).