Property Revaluation 301: Estimating Your Post-Revaluation Tax Bill

This is part of an ongoing series about property revaluation in Jersey City.
Please note, an update given new state tax data reported in 2017: the 2016 equalized tax rate is reported to be 1.86%.  This is the best predictor of what the new tax rate will be, post-Revaluation. 

I’ve been asked by a few people: “How do I estimate what my taxes will be after the city revalues?”  For non-abated homeowners, this is fairly straightforward and based on publicly available tax data.

Here’s the formula:

Post-Revaluation Tax Bill = Your Property’s Current Market Value * 2.07%

This formula is based on the following:

  • Current Market Value is what your home would sell for today.  You can get this estimated sale price from a local realtor, who can use recent comparable sales (“comps”) in your neighborhood as reference.  This serves as a proxy for your estimated “assessed” value after Revaluation occurs.
  • The 2.07% 2015 tax rate is provided by the state as an “equalized” tax rate, meaning it is the tax rate relative to Jersey City’s 2015 market value.  This equalized rate is derived from two numbers reported by NJ Dept of Community Affairs:
    • the 2015 tax levy ($448 million) divided by
    • the estimated 2015 market value of the tax base ($21 billion).

A quick note: the estimated $21 billion market value of the tax base is based on prior year sales in Jersey City. When the city does finally revalue, it will measure market value more precisely, using a ground-up approach, i.e. by assessing each property.

A Two-House Revaluation Example

Additionally, I’ve put together a quick computation below showing the impact of revaluation on two sample houses, using data specific to Jersey City.

Revaluation-2 Home Example v2

A few observations on the example above:

  • House #1 *and* House #2 saw market appreciation on their homes, but only House #2’s taxes increased.
  • We can see that, pre-revaluation, House #1 was overpaying its fair share of the tax burden and House #2 was underpaying.  Revaluation remedied this imbalance.

5 Comments

  1. Using zillow is not always an accurate way to determine current value. I would think using comparable sales on your particular block would be a more accurate way to determine true value. This is especially true on my block.

    • Thank you for your comment. I think your point is fair and I’ve modified my post to reflect your feedback.

  2. Can you explain the 21 billion more? Wouldn’t only a small portion of JC’s tax base have gone on sale last year? Also, have they already appraised all of our homes to determine Current Market Value? How can we find out the appraised value?

    • Great question. The $21 billion is the 2015 market value of the taxable real estate in Jersey City. The market value is derived from the previous year’s sales, which act as a sample for the entire tax base. So yes, only a small portion of JC’s tax base went on sale last year, and those served as a proxy for what “market value” is measured at in Jersey City. So the market value is based on true 3rd party / arms length transactions, but on a subset of properties only.

      Regarding your appraised value – best to contact a realtor who can have a nuanced discussion about your specific facts and circumstances.

      Thank you for your question.

  3. Pingback: Van Vorst Park Association | April 2016 VVPA Monthly Newsletter

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