The purchase price (ie the price at which you closed) is the best indicater of the true market value of that property. However, just because you purchased your property at that price, that doesn't mean the assessor will agree with your valuation. If you intend to appeal/contest the assessment, then you'll need to arm yourself with enough facts to strongly support your case.

Did you get an inspection and/or an appraisal? Do you have a repair estimate (if applicable)? Do you have any recent comps? Do you have any information on any recent listings? Most title companies or escrow companies keep records on the recent closings. If you closed with a title company, then you should be able to ask someone there for a copy of a report containing that data. Also, if you were working with an agent, then s/he can also pull similar data from the MLS for you. Plus, that agent should also be able to pull data about all of the properties that went under contract around the same time that yours did.

Also ask to check the assessors comments explaning how s/he reached that valuation. An investor I know of, after having read through one of those reports, identified several errors in the comments on one of his properties. He noticed that the assessor erroniously increased the size of the living area (aka square footage), and assessed that investor's property as a lakefront property instead of what it was: a property with a lakefront view. Ultimately, that investor had to go back to the architectural drawings, a survey map, and a platte map to prove his point. Nevertheless, he ended up getting refunded the overage with interest.

So, the point is that you can fight this and win, but you need to build a strong case with enough supporting facts.

Hi Maabhasan,
In order to reduce your property taxes, you will have to appeal to the county court. Since you are buying a foreclosure or distresses property, you will have to establish the market value as if it wasn't distressed. You will need comps to see what your neighbors or similar houses sold for without being distressed. I suggest working with a local realtor to get the comps and also a real estate attorney who has been successful at getting property tax reductions. As soon as the court hears your property was distresssed, your purchase price will have less significance.
Hope that helps.
TJ

It is highly unlikely a reduction in the assessment will happen just because you purchased at a lower value than it's assessment. there is a misconception that property owners feel their value is worth their assessment. Not so! Its the only tax that is based on unrealized gains. You buy the house today for market value 300k 5 years its worth 6ook you are assessed on the 600k what realized gain did you make other than the possibility to sell the house at 600k. what happens when values go down again or you sell for a less amount. The IRS doesn't even tax you this way... only property tax!

If appealing your taxes get your ducks in line and be prepared... Non usable deed transactions are needed to be considered when using valuations. Check out the state of NJ list of non usable transactions when appealing property tax. Considerations will be the market value of your home at retail... What have other homes sold. Most cases you can provide verified proof of lesser values today. Not because of foreclosures though... Because of the result of these foreclosures lowering values of like kind property in the area selling at retail. I have not read the new non usable deed transactions yet, there were only 22 3 years ago then 27 now 33. My appealing days are over for now I sold all my properties the last 3 years ago except 2 my home and my one beach house. Saw this coming coming but not to this extent. I'm waiting for a decision now on my taxes, if no reduction is given then I guess I go to the appeals by April 1st, like everyone else. But the meeting now works, I've done it a few times successfully. I make it a habit not to brag about my success to my neighbors though. I'll help them but if asked but I do not boast my success. Makes sour neighbors and they go in and say "he did it why can't I". It doens't work that way. You cannot use anothers assessment to compare to yours...
It takes a lot of work to get this done right. Your best bet is to argue now before 16-17th of this month. Set up an appointment with assessor and discuss your options to reduce your tax. You just may get him on a full and happy stomach. Around tax time they are very stressed and have little time or patience...

You are probably getting a good deal but not much chance of a reduction unless you fight it. Do not use other assessments only comparable values sold... (remember non usable transactions)


http://www.nj.gov/treasury/taxation/pdf/lpt/guidlines33.pdf list of non usable deed transactions
http://www.state.nj.us/treasury/taxation/pdf/lpt/ptappeal.pdf property tax brochure


Good luck
You may email me personally for more info

Only way to have potential reduction in tax when the title company submits the purchase price county records then follow up with city for potential reduction. Usually there is a formal hearing during certain time of year.