Community Tax Revaluation

PresentationFor Public Meetings Held:

August 29th, 2017

August 31st, 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

What is a Property Revaluation?

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

The Property Tax Revaluation in Trenton

• 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

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

DescriptionMunicipal

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

Summary of Ratables, Tax Rates, and Levies

*Data from Mercer County Board of Taxation

2017: 43% Non-residential

2016:32% Non-residential

Timeline of Property RevaluationDate Event

March 2015 Public presentation on the revaluationMay 2015 Initial introductory letter mailed

June 2015Income and expense forms (Chapter 91) mailed (1st year)

commercial property onlyAugust 2015 Public presentation on the revaluation

September 2015Income and expense forms (C. 91) mailed (1st year)

commercial property only, 2nd mailingSeptember 2015 Public presentation on the revaluation

May 2016 Estimate and refusal letter mailed - residential property only

September 2016Income and expense forms (Chapter 91) mailed (2nd year)

commercial property onlyJanuary 2017 Value notification letters mailed

April 2017 Notification results of informal reviews with taxpayers mailedApril 2017 Official assessment notices (Chapter 75) mailed - mailed by City of TrentonMay 2017 Deadline to file tax appeals

Results of Property Tax Revaluation

1

70% of taxpayers saw their tax bills decrease

2

Trenton taxpayers payers, in total, saw

their tax bills decrease by $2.2 million

3

80% of the increase came from non-

residential property

4

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

The tax assessment calendar

1

The appeal calendar

• Mercer County Board of Taxation

• Tax Court of New Jersey

2

The valuation process

3

Settlement negotiations and adjustments of

assessments

4

The 2018 tax list

5

Next Steps

• Breakout sessions

• Scheduling

• Thank You