How is property assessed in New Jersey?

In New Jersey, property assessment is primarily based on the market value of the property. This means that assessors evaluate properties by analyzing their current worth in the real estate market, taking into consideration factors such as location, property condition, size, and recent sales of comparable properties. The goal is to ensure that the property is assessed at its true value, which reflects what it would likely sell for under normal market conditions.

Assessing properties based on market value promotes fairness in taxation, as it aligns the property tax obligation with the actual value of the property, rather than arbitrary figures or outdated valuations. This approach also helps maintain equity among property owners within the same municipality, as their tax burdens are based on the relative values of their properties.

Other assessment methods, such as using historical cost, a fixed percentage of the purchase price, or average neighborhood property values, do not accurately reflect the current market conditions and can result in inequitable tax assessments. Historical cost does not account for changes in the market, while a fixed percentage of the purchase price ignores market fluctuations. Similarly, average neighborhood values may not accurately reflect the uniqueness of a specific property.