Community Tax Revaluation Presentation For Public Meetings Held: August 29 th, 2017 August 31 st, 2017
How are property taxes calculated? Property taxes are the main source of revenue for Trenton, like all New Jersey cities The property tax levy is the amount of money a city needs to raise in property taxes to support its budget, paying for police, fire, sanitation, parks, and other public services The property tax rate is the percentage, which, when applied to the total assessed value of real estate in the city equals the property tax levy The property tax bill for each property owner is calculated by multiplying the tax rate by the assessed value of that property RATE x ASSESSED VALUE = PROPERTY TAX LEVY
A property revaluation is a comprehensive way to make sure the assessed value and the market value of all property is as close as possible Revaluations are normal and common; about 30 happened in New Jersey last year In New Jersey, a property s assessed value (the number used to calculate the property tax bill) does not usually equal the market value (what a property may sell for) In many New Jersey municipalities, assessed values are significantly higher or lower than their market value, causing the tax rate to increase in order to raise enough revenue for the tax levy. Since the tax rate is calculated from the value of all property in the city, newer construction and other recently assessed properties will be hit with much higher taxes since their values are closer to market What is a Property Revaluation?
Assessed values in Trenton were often not close to market values, as the last revaluation was in 1992 In 2010, the Mercer County Board of Taxation ordered the Trenton municipal government to conduct a citywide revaluation of more than 30,000 residential and commercial properties in the city. The City selected New Jersey-based Appraisal Systems, which has done this work in numerous other municipalities in the state The Property Tax Revaluation in Trenton
Summary of Ratables, Tax Rates, and Levies Description CLASS 1 Vacant Property CLASS 2 Residential CLASS 4A Commercial CLASS 4B Industrial CLASS 4C Multi-Family Total Assessed Value 2017 $21,072,900 $1,338,117,730 $867,099,809 $62,428,000 $90,048,100 $2,395,945,829 2016 $18,227,780 $1,351,675,310 $546,753,220 $35,005,000 $52,902,600 $2,019,401,562 % Change 16% -1% 59% 78% 70% 19% $ Change $2,845,120 ($13,557,580) $320,346,589 $27,423,000 $37,145,500 $376,544,267 Description Municipal Tax Rate Calculated Municipal Levy Total Tax Rate Calculated Total Tax Levy 2017 3.379 $80,959,009.56 4.955 $118,719,115.83 2016 3.936 $79,483,645.48 5.753 $116,176,171.86 % Change -14.15% 1.86% -13.87% 2.19% $ Change $1,475,364 $2,542,943.97 2017: 43% Non-residential 2016: 32% Non-residential *Data from Mercer County Board of Taxation
Timeline of Property Revaluation Date March 2015 May 2015 June 2015 August 2015 September 2015 September 2015 May 2016 September 2016 January 2017 April 2017 April 2017 May 2017 Event Public presentation on the revaluation Initial introductory letter mailed Income and expense forms (Chapter 91) mailed (1st year) commercial property only Public presentation on the revaluation Income and expense forms (C. 91) mailed (1st year) commercial property only, 2nd mailing Public presentation on the revaluation Estimate and refusal letter mailed - residential property only Income and expense forms (Chapter 91) mailed (2nd year) commercial property only Value notification letters mailed Notification results of informal reviews with taxpayers mailed Official assessment notices (Chapter 75) mailed - mailed by City of Trenton Deadline to file tax appeals
Results of Property Tax Revaluation 1 2 3 4 70% of taxpayers saw their tax bills decrease Trenton taxpayers payers, in total, saw their tax bills decrease by $2.2 million 80% of the increase came from nonresidential property Trenton homeowners saw their tax bills decrease, in aggregate, by $5 million.
Results of Property Tax Revaluation All Property
Results of Property Tax Revaluation (Commercial)
Results of Property Tax Revaluation (Residential)
Results of Property Tax Revaluation (Residential, Increases emphasized)
The Tax Appeal Process 1 2 3 4 5 The tax assessment calendar The appeal calendar Mercer County Board of Taxation Tax Court of New Jersey The valuation process Settlement negotiations and adjustments of assessments The 2018 tax list
Next Steps Breakout sessions Scheduling Thank You