A citywide property revaluation has been in the works since 2016 when the Hudson County Board of Taxation ordered Bayonne to conduct its first reval since 1991. The reval was originally ordered to be completed by January of 2019, but the deadline was put back in order to give time for the Bayonne tax assessor’s office to complete new digital and physical tax maps. Those maps, which corrected 1,900 parcels that changed since 1991, were approved by the county last week. Now, the baton will be passed to an outside contractor to assess all 13,948 parcels of land in Bayonne.
That process is expected to begin in February or March by a contractor that the Bayonne City Council will appoint at its December meeting. Property revaluations will take effect in 2020; every property owner will receive a letter and notice for inspection. Property owners can appeal their assessments to the Hudson County Board of Taxation if they find their assessment to be inaccurate. At least three information sessions, one in every ward, will be held in early 2019, according to Joe Nichols, Bayonne Tax Assessor.
“The new map is excellent. It’s digitized and will be available online,” Nichols said. “Once we have final copies, we’ll arrange with our vendors to make it available to the public.”
Everybody’s doing it
All municipalities are required by statute to perform property revaluations when the ratio of true value dips down to 80 percent of assessed value. The ratio of true value is calculated by dividing the assessed value of a home by its true value, or what that property would go for on the market.
For instance, if a property on one side of town is assessed at $70,000, and that same property’s current market value is $100,000, the ratio of true value would be 70 percent. The objective of a revaluation is to assess all properties at 100 percent true market value. Bayonne’s total tax levy of $183 million for the school, city, and county will remain the same.
“If your house is properly assessed and the [municipal and school] budget doesn’t change, the tax bill will be the same,” Nichols said.
According to the NJ Division of Taxation, the aggregate assessed value of Bayonne properties is $2.1 billion, and the aggregate true value is $5.8 billion, for an average true value ratio of 36.88, far below the roughly 75 ratio that should trigger a reval.
“If you were creating a system from scratch to make it as complicated as possible, this would be it.” – Joe Nichols
Revals are theoretically not supposed to increase total property tax revenue for a city, but rather more fairly distribute the tax burden in accordance with market rates.
Get out the tape measure!
True property values will be determined using statistical studies composed of local property sales data. Property revals are known to take a long time to complete because of the arduous map-making process and the requirement that a tax assessment firm gain access to every Bayonne property for assessment using a tape measure. Inspectors are required to make three attempts for each property.
Jersey City completed a citywide property revaluation in 2017 for the first time since 1989. Some of the assessments downtown were eye-popping, such as a 5,972 square-foot home that saw its assessed value jump from $175,000 to more than $3 million, which increased that property owner’s tax bill by about $50,000. Stories like this send shivers down the spines of Bayonne residents, half of whom are already housing burdened (defined by spending 30 percent or more on housing costs).
Big tax hike not anticipated
While Bayonne’s property values have risen dramatically since 1991, very few properties will likely see a very big hike in their tax bill, according to Nichols.
“The good thing about Bayonne is that we don’t have as wide a variation in property values. We do have a few million-dollar homes, but only a few,” he said. “Our range is three to four times the [assessed] value at most. I don’t think there will be as dramatic an impact as there was in Jersey City.”
“Should we have done a reval ten years ago? Yeah, but I don’t make these decisions,” Nichols continued. “Revals don’t come around often because New Jersey is so lax about mandating it.” Meanwhile, mayors are averse to ordering revals because higher tax bills and the outrage that accompanies them can lead to being voted out of office.
Part of that frustration, Nichols said, is a result of misunderstanding of an annoyingly complicated property tax system.
“If you were creating a system from scratch to make it as complicated as possible, this would be it,” Nichols said. “We want to be transparent and make sure people understand. As scary as the uncertainty might be, once you understand it, it’s not as frightening and it’s not going to have a devastating effect.”
Rory Pasquariello can be reached at email@example.com