This article is the second in a series that deals with the legal implications of Superstorm Sandy, which devastated many areas of New Jersey on October 29, 2012. Owners of property with a structure that has suffered substantial damage or that has been destroyed should be aware that they may qualify for a lower property tax assessment, which may result in lower property taxes next year.
New Jersey’s taxation statute, N.J.S.A. 54:4-35.1, states that:
When any parcel of real property contains any building or other structure which has been destroyed, consumed by fire, demolished, or altered in such a way that its value has materially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casualty, which depreciation of value occurred after October first in any year and before January first of the following year, the assessor shall, upon notice thereof being given to him by the property owner prior to January tenth of said year, and after examination and inquiry, determine the value of such parcel of real property as of said January first, and assess the same according to such value.
Thus, property owners impacted by Superstorm Sandy must provide notice to their local tax assessors by January 10, 2013, in order to potentially lower their equalized assessed value for 2013. Although a lower assessed value may not translate into a lower tax burden, especially in municipalities where many properties were severely damaged by the storm, it at least potentially gives property owners an opportunity to lessen their financial burdens during the rebuilding process. Of course, property owners should consult their own tax advisors for advice.
This blog contains general information, not tax advice. For questions relating to your property tax assessment, contact your tax advisor.
IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. For more information visit www.gibbonslaw.com/circular230.
Jennifer P. Smith is an Associate in the Gibbons Real Property & Environmental Department.