Triple Play What property owners should know about contesting taxes

Triple Play is a weekly NJBIZ feature that asks top executives in New Jersey to talk about three things related to their industry.

John Lloyd heads up the real property tax group of law firm Chiesa Shahinian & Giantomasi in West Orange.

We asked John what owners of multifamily and commercial properties should know about contesting their taxes:

Careful analysis is critical. The first step in determining whether a property is a candidate for an appeal is developing a thorough understanding of the property tax system in New Jersey and how the “market value” of the property is assessed within that system. Valuation principles owners have encountered in other contexts may not be employed the same way in New Jersey’s property taxation system. Bear in mind, too, that further investigation could reveal that your assessment is below where it could be and should not be put in play through an appeal.

Know your municipality. More than 95 percent of tax appeal litigation is resolved through settlement. Therefore, it is imperative that owners and their representatives know how to negotiate effectively with their municipality. Municipalities vary in terms of politics and budgets, and some are more aggressive than others.

Make sure your advisory team meets strict criteria. When evaluating real estate tax professionals, keep in mind that they should be fully versed in the correct valuation methodology, related property assessment laws and regulations and be aware of the particular municipality’s practices. Furthermore, these professionals must have the ability to effectively negotiate with the municipality, but if there is no settlement, skillfully litigate a tax appeal to conclusion.