In order for an assessment to be deemed excessive or discriminatory, a taxpayer must prove that an assessment does not fairly represent one of 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 precede the assessment date, especially property sales used as comparables.
- The other stand is the "common level" or common level range established in your municipality. To explain the common level rang you must consider what happens following a revaluation. Once a revaluation is completed, external factors such as inflation, appreciation and depreciation 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 all property sales to represent the assessment level in your community. In any year, except the year a revaluation 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.