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Township of Hanover Revaluation

VIEWS: 2 PAGES: 24

									February 23, 2012




  Township of Hanover Revaluation
               2012
        I - What is a Revaluation ?

• Program undertaken to appraise all real
  property to its fair market value

• Fair Value Market
  – the price that the assessor believes the property
    would sell for at a bona fide sale
        II – Need for Revaluation ?

• Revaluation seeks to spread the tax burden
  equitably throughout the Township.
• Ensures that every property owner is paying
  their fair share of the property tax.
• Two properties having the same market value
  should be paying the same amount in tax
• When Ratio < 50% County will determine a
  Revaluation is needed. It is not a decision left
  up to the Municipality (48.64%)
       III – What happens during a
              Revaluation ?
• Interior & exterior of each property are
  physically inspected
• Recent sale are studied and used in the
  estimate of property valuations
• Any other information that may have an
  influence on the value are reviewed
• Determination of each property’s fair value is
  established
  IV – BIG QUESTION will Revaluation
           Increase Taxes ?
• Just because the revaluation will increase
  everyone’s assessment IT DOES NOT mean
  your taxes will increase

• Assessments are only used to apportion the
  amount to be raised by taxes for the operation
  of the Township / Schools / County & Fire
  District
    Terminology – Key Definitions
• Amount Raised by Taxation: Total budget
  appropriations less anticipated revenues (State
  Aid, Licenses/Fees, Court, Hotel Tax & Interest)
• Assessment: The valuation of property to levy a
  tax against – per $100
• Tax Rate: Amount to be Raised / Total
  Assessment
• Fair Market Value: A price a buyer would be
  willing to pay or a seller would be willing to
  accept for a property
                       Tax Calculation
Amount Raised           / Assessment                 = Tax Rate
2011
  15,000,000             2,000,000,000                     0.75
2012
  15,000,000              4,000,000,000                    0.375

   Assessed Value               * Tax Rate             = Taxes
2011 250, 000                     .7500                 1,875
2012 475,000                      .3750                 1,781

The actual tax rates for 2012 will not be set for several months until all
the units set their operating budgets – just example
       V - Results of Revaluation
• Taxpayer whose property was under valued
  before the revaluation will be paying a larger
  share of the tax burden (estimate 1/3)

• Tax payer whose property was overvalued before
  the revaluation will be paying a lesser share of
  the tax burden (estimate 1/3)

• Taxpayer whose property was accurate will pay
  same share of the tax burden (estimate 1/3)
                  VI - Ratio

• Ratio before revaluation was 48.64%

2011 Assessed Value Ratio      2011 Market Value
      250,000      48.64%         514,000

• Compare 2011 Market Value to current 2012
  Revaluation Assessed/Market Value
Assessment Card
        Green Assessment Cards

• Not a Tax Record, does not state if taxes were
  paid, what amount were paid, or show any
  deductions or rebates

• Purpose is to only provide property owner
  with the Assessed Value of their property
Assessment Card
            VII – Ratio Determined
• 1997 revaluation brought assessed value to 100% of market value

• Over time, as sales occur & are recorded, market value increases
  causing ratio to lower

• Non Bona fide sales are not used in determining ratio
  (sales between family for a minimal amount $1)

• When Ratio < 50% County will determine a Revaluation is needed.
  It is not a decision left up to the Municipality

• Expensive - $360,000
      VIII – Benefits of Revaluation

• Confusion over tax rate comparisons for Home
  Owners & Business Properties

• General Tax Rate vs Effective Tax Rate

• Aids in defense of tax appeals
                Ratable Base

• Main element in establishing tax rate

• Declined over the last 3 years due to tax
  appeals
                                  Township of Hanover
                             Summary of Ratable Base 2007-2011

                                   2,039,915,715
2,050,000,000    2,031,454,261



                                                    2,013,787,492
2,025,000,000
                                                                      1,998,041,809



2,000,000,000
                                                                                         1,974,169,160



1,975,000,000




1,950,000,000




1,925,000,000




1,900,000,000
                2007             2008              2009             2010              2011
               Ratable Base

• Main element in establishing tax rate
• Declined over the last 3 years due to tax
  appeals
• Residential vs Commercial
• Commercial properties – pay full amount of
  taxes with no demand on schools or municipal
  services
                      Township of Hanover
         Comparison Residential to Commercial 2007 -2011

                                                            60%
                                57%            58%
               56%
55%



       40%            40%
                                      39%             38%
                                                                   37%




2007           2008            2009            2010         2011

                        Residential   Commercial
              Tax Appeals
     Township of Hanover 2011 Tax Rate Summary
                                Rate per   Percentag
     Description of Tax          $100          e       Tax Dollar

Municipal Tax                     0.746       25.13%        $0.25

County Tax                        0.456       15.36%        $0.15

Municipal Open Space Tax          0.010        0.34%       $0.003

County Open Space Tax             0.037        1.25%        $0.01

District School Tax               1.105       37.22%        $0.37

Regional School Tax               0.520       17.52%        $0.18

Fire District Tax (Average)                    3.18%        $0.03

Total Tax Rate                    2.874      100.00%   $   1.00

Fire District 2 Tax               0.067

Fire District 3 Tax               0.122

District 2 (Whippany) Tax         2.941

District 3 (Cedar Knolls) Tax     2.996
      Tax Rates General vs. Effective

                    DEFINITION OF GENERAL & EFFECTIVE TAX RATES

It is expressed as $1 per $100 of taxable assessed value.


This rate is used to compute the tax bill.

Example General Tax Rate:


              Assessed Value                                  $                   250,000
              xGeneral Tax Rate                                                      1.500
              Tax Bill                                        $                      3,750


The   Effective Tax Rate is a statistical study that enables the comparison of one district to another district
(based on the assumption that all districts are at 100% valuation).


This rate is NOT to be used to compute the tax bill.
Tax Rates General vs. Effective
                   2011 TAX RATES - Morris County
                                       General
              DISTRICT (39)            Tax Rate     Ranking

BOONTON TOWN                              2.479       26
BOONTON TOWNSHIP                          1.834        7
BUTLER BOROUGH                            3.028       35
CHATHAM BOROUGH                           1.750        6
CHATHAM TOWNSHIP                          1.653        4
CHESTER BOROUGH                           2.407       23
CHESTER TOWNSHIP                          2.181       15
DENVILLE TOWNSHIP                         2.772       30
DOVER TOWN                                1.885        8
EAST HANOVER TOWNSHIP                     2.080       12
FLORHAM PARK BOROUGH                      1.288        2
HANOVER TOWNSHIP                          2.874       32
HARDING TOWNSHIP                          1.051        1
JEFFERSON TOWNSHIP                        2.227       16
KINNELON BOROUGH                          2.875       33
LINCOLN PARK BOROUGH                      2.132       14
MADISON BOROUGH                           2.709       29
MENDHAM BOROUGH                           1.908       11
MENDHAM TOWNSHIP                          1.901       10
MINE HILL TOWNSHIP                        2.324       19
MONTVILLE TOWNSHIP                        3.340       36
MORRIS TOWNSHIP                           2.379       21
MORRIS PLAINS BOROUGH                     1.887        9
MORRISTOWN TOWN                           2.635       28
MOUNTAIN LAKES BOROUGH                    2.123       13
MOUNT ARLINGTON BOROUGH                   2.387       22
MOUNT OLIVE TOWNSHIP                      2.954       34
NETCONG BOROUGH                           2.237       17
PARSIPPANY TROY HILLS                     2.498       27
LONG HILL TOWNSHIP                        2.815       31
PEQUANNOCK TOWNSHIP                       1.727        5
RANDOLPH TOWNSHIP                         3.346       37
RIVERDALE BOROUGH                         1.492        3
ROCKAWAY BOROUGH                          2.421       24
ROCKAWAY TOWNSHIP                         3.596       38
ROXBURY TOWNSHIP                          3.873       39
VICTORY GARDENS BOROUGH                   2.253       18
WASHINGTON TOWNSHIP                       2.333       20
WHARTON BOROUGH                           2.422       25
Tax Rates General vs. Effective
                 2011 TAX RATES - Morris County

                               General    Effective
           DISTRICT (39)       Tax Rate   Tax Rate    Ranking

    BOONTON TOWN                  2.479      2.225      34
    BOONTON TOWNSHIP              1.834      1.739      11
    BUTLER BOROUGH                3.028      2.241      35
    CHATHAM BOROUGH               1.750      1.583      8
    CHATHAM TOWNSHIP              1.653      1.531      6
    CHESTER BOROUGH               2.407      2.076      28
    CHESTER TOWNSHIP              2.181      1.943      18
    DENVILLE TOWNSHIP             2.772      1.860      16
    DOVER TOWN                    1.885      1.894      17
    EAST HANOVER TOWNSHIP         2.080      1.336      3
    FLORHAM PARK BOROUGH          1.288      1.264      2
    HANOVER TOWNSHIP              2.874      1.379      4
    HARDING TOWNSHIP              1.051      0.812      1
    JEFFERSON TOWNSHIP            2.227      2.098      30
    KINNELON BOROUGH              2.875      2.047      26
    LINCOLN PARK BOROUGH          2.132      2.153      32
    MADISON BOROUGH               2.709      1.579      7
    MENDHAM BOROUGH               1.908      1.747      12
    MENDHAM TOWNSHIP              1.901      1.724      10
    MINE HILL TOWNSHIP            2.324      2.049      27
    MONTVILLE TOWNSHIP            3.340      1.828      15
    MORRIS TOWNSHIP               2.379      1.589      9
    MORRIS PLAINS BOROUGH         1.887      1.753      13
    MORRISTOWN TOWN               2.635      1.986      21
    MOUNTAIN LAKES BOROUGH        2.123      2.021      23
    MOUNT ARLINGTON BOROUGH       2.387      1.951      19
    MOUNT OLIVE TOWNSHIP          2.954      2.505      39
    NETCONG BOROUGH               2.237      2.345      37
    PARSIPPANY TROY HILLS         2.498      1.976      20
    LONG HILL TOWNSHIP            2.815      2.029      24
    PEQUANNOCK TOWNSHIP           1.727      1.813      14
    RANDOLPH TOWNSHIP             3.346      2.132      31
    RIVERDALE BOROUGH             1.492      1.519      5
    ROCKAWAY BOROUGH              2.421      2.031      25
    ROCKAWAY TOWNSHIP             3.596      2.406      38
    ROXBURY TOWNSHIP              3.873      2.199      33
    VICTORY GARDENS BOROUGH       2.253      2.000      22
    WASHINGTON TOWNSHIP           2.333      2.090      29
    WHARTON BOROUGH               2.422      2.259      36
                  Summary
• Determination for Revaluation is made by
  County when sales ratio is less than 50%
• Goal is to set all property valuations at 100%
  of Fair Market Value
• 1/3 Owners will have a tax increase
  1/3 Owners will have a tax decrease
  1/3 Owners will have a tax remain the same

								
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