In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove an assessment does not fairly represent one of the two standards:
- Following a revaluation, all assessments must represent 100% of true market value as of the previous October 1. The October 1 pre-tax date is called the annual "assessment date". All evidence submitted in a tax appeal must be on or near the assessment date, especially property sales used as comparables.
- The other standard is the "common level" or common level range established in your municipality. To explain the common level range you must consider what happens following a revaluation. or reassessment. Once a revaluation or reassessment is completed, external factors such as inflation, appreciation, and depreciation may cause values to increase or decrease at varying rates.
Other factors such as physical deterioration may contribute to changes in property values. Obviously, if assessments are not adjusted annually, a deviation from 100% of true market value will occur.
The State Division of Taxation annually conducts a fiscal year sales survey, investigating most property transfers that occur in your community, with your local assessor assisting. Every sale is compared individually to every assessment to determine an average level of assessment in a municipality. An average ratio is developed from a sampling of property sales to represent the assessment level in your community. In any year, except the year a revaluation or reassessment is implemented, the common level of assessment is the average ratio of the district in which your property is situated and is used by the Tax Board to determine the fairness of your assessment. The sales ratios are reviewed inter- and intra- for each municipality.