July 20, 2013 at 9:47 AM
As to be expected the mailing of the 3rd quarter estimated tax bill has resulted in a number of questions. We felt it would be helpful to share with you the most frequently asked questions and the answers. This does not preclude you from visiting Borough Hall to speak to officials about your particular case. However by reading this you may save yourself some time.
1. Why did we go through this revaluation?
It was mandated by Morris County consistent with New Jersey state law. The last revaluation was effective 13 years ago in 2000. It is appropriate to have properties assessed at close to, if not at, current market value. Prior to the revaluation, the official assessed property values were less than 60% of the market value. Hence, it is clear that Madison was overdue for a revaluation.
2. Why are the tax bills marked estimated?
The largest portion of your tax bill is paid to the Board of Education, which has approved a 2% increase. Next in size is the Borough of Madison, which approved an increase of 1.48%. However the County government has yet to tell us how much their portion will increase. Since we need money to keep our schools and government running we had to estimate the County portion of your tax bill. In order to avoid having to come back for an additional increase our estimate for the County is conservative. If the final County portion is lower, then an adjustment will be made to your fourth quarter tax bill.
3. Am I correct in multiplying the amount due in August by four to calculate my annual tax?
No that would be a mistake. Because the budgets for the school, county and municipality are not finalized until the middle of the second quarter, any tax increase for the year is reflected in the final two quarters.
A hypothetical example may help. In 2012, Bob’s House had a property tax bill of $8,000 for the year. Because the budgets were not yet finalized, Bob’s first two payments in 2013 were $2,000 a quarter., which is based on his 2012 taxes.
Because of the revaluation and the increases in school, county and local taxes, Bob’s 2013 property taxes increased by $500 to $8,500 a year (or $2,125 per quarter). Bob previously paid $2,000 per quarter for the first and second quarter, therefore the entire $500 increase for 2013 is reflected in the 3rd and 4th quarter. As such, the Borough mailed a 3rd quarter estimated bill to Bob of $2,250. So, it is NOT appropriate to multiple the $2,250 number by four, as that would equal $9,000 and as mentioned earlier Bob’s estimated tax is $8,500 for the year. In summar
Bob’s Property Taxes
2012 taxes, $8,000 for year, or $2,000 per quarter
2013 taxes, estimated in June to be $8,500 for the year, payable as follows:
Quarter 1 = $2,000
Quarter 2 = $2,000
Quarter 3 = $2,250
Quarter 4 = $2,250*
* Certified tax figures from the County are expected soon. Our recent 3rd quarter estimate is ‘conservative’ and as such Bob’s actual tax bill may be slightly less then $8,500. If that is the case, then the Quarter 4 payment of $2,250 may be reduced. Final tax bills should be mailed out by the end of September.
IMPORTANT. If your mortgage company pays your property tax for you, make sure that they are calculating your escrow based on your actual taxes and not just your third and fourth quarter payments.
4. Why wasn’t the assessed value of all houses increased by the same amount?
Many variables affecting the current value of your home have changed since the last revaluation 13 years ago. The overall condition of your home, whether you made significant improvements to your home, recent sales in your neighborhood, the overall real estate market for homes in your price range etc. all influence not only the actual value of your home, but also its value relative to other homes in the Borough.
5. I thought the revaluation would not affect the taxes on my home but it has. Why is that?
The revaluation did not affect the total amount of property taxes collected, but it did affect the amount of taxes collected on each home. Although the assessed value of homes went up an average of 63% every home did not go up that amount. (See question 4.) Therefore it only makes sense that homes with higher than average increases in assessed value would see an increase in taxes whereas a home that appreciated by less than the average would likely see a decrease in taxes.
6. What can I do if I believe that the revaluation of my home is too high?
- Call or visit us. The Tax Assessor is normally available Thursday and Friday but is available extra hours for the next few weeks. The CFO is available every day. And the Administrators can also help. It is best if you call 973-593-3042 x3067 between the hours of 8 AM and 4:30 PM.
- Review your property record card. This card helps the Assessor value your property and includes information like size of lot, total square footage of your home, number of bathrooms, number of rooms, number of fireplaces, etc. It is important to check to make sure that the information on this card is correct.
Annually you have the legal right to challenge your assessment; however there is only a fixed amount of time during which you can file a challenge. That period for 2013 has passed, and the next opportunity will be in January of 2014 with a deadline of April 1, 2014.
More information about tax appeals can be found at the following state site:
State of NJ – Property Tax Appeal Brochure
The Tax Appeal form can be found at the following link: