From the Record:
Homeowners at the lower end of North Jersey’s housing market — still suffering disproportionately from the real-estate slump — are now taking another hit in the form of inflated property tax bills that may be costing them hundreds of dollars extra per year.
An analysis by The Record shows that municipal tax offices across the region have been slow to respond to a prevailing trend of the recent tepid recovery — property values in most towns rising more slowly in modest neighborhoods — saddling those homeowners with an increasingly larger share of the property tax burden.
Specifically, property assessments used to calculate taxes have not been updated in many municipalities to accurately reflect the weaker markets for lower-priced homes, resulting in those owners being overassessed and, by extension, overtaxed. At the same time, higher-end homes that have increased in value faster are now underassessed and undertaxed.
The much-reviled property tax system in New Jersey, where homeowners pay more than their counterparts across the nation, is based on a requirement that all property owners be assessed at roughly the same percentage of market value, so that the tax burden is fairly distributed.
The Record’s analysis — focusing on residential sales data for 2015 — shows the disparities are hurting the lower end of the housing market, experts and officials said.
“Homeowners there are paying more then they should,” said Rick DelGuercio, president of a real-estate appraisal company based in Glen Rock. “Not only are the lower-end properties not benefiting from the market recovery, but based on the formula for determining property taxes town by town, they are now shouldering more of the property-tax burden. They’re suffering from both ends.”
Art Carlson, the assessor in Hackensack, Saddle Brook, Ridgefield Park and Edgewater, which had some of the region’s largest disparities in 2015, said: “Facts are facts. The higher-end property owners aren’t paying the same percentage as the lower end. The burden is on the lesser homes and people with lesser incomes.”
Disparities vary widely from town to town, with some places seeing only minimal differences well within the norms allowed under law. But in the worst cases, owners of lower-end homes would have saved upward of $1,000 if assessments were updated to reflect conditions last year.
Local municipalities with the biggest gaps in Bergen County in 2015 included Bergenfield, Cresskill, Edgewater, Garfield, Hackensack and Ridgefield Park. Some of the widest in Passaic were in Hawthorne, Paterson and Pompton Lakes.
The inequities were largest in the northeastern part of the state, also afflicting Hudson, Essex and Union counties. Bayonne, East Orange, Jersey City and Newark were among the most severely affected municipalities.