Property Tax Appeal Math and Supporting Documentation
With home prices down significantly in New Jersey from levels during the peak of the artificially inflated real estate boom in 2006, more homeowners may be entitled to a reduction in their property taxes in this prolonged economic downturn. Homeowners who bought during the height of the real estate boom or who live in towns that conducted recent revaluations, may be paying more property taxes than their homes are worth. Figuring out if your home assessment is fair, and if you are a good candidate for a NJ property tax appeal in 2010 and beyond will require some grunt work, and you should start the process knowing most appeals fail. This sobering fact is not meant to discourage, but to give a realistic picture of what a taxpayer faces going into this process. At a time when cash-poor consumers are worrying about the economy and just holding onto their jobs, that leg work could go a long way, either resulting in a successful NJ property tax appeal, or at least in saving you time, effort, and misery if you don’t qualify.Already, the average property owner looking to do a NJ property tax appeal pays about $6,000 a year in property taxes, about twice the national average. And with New Jersey already facing projected budget shortfalls in the $1 to $2 billion dollar range and already falling revenues, the chance of property owners getting any kind of meaningful property tax reform legislation is slim.One of the few ways to reduce your property taxes is to catch any mistakes and correct any errors in your annual tax assessment. The implosion of the housing market has caused housing prices to fall over the past three years. Many New Jersey homeowners may now have an opportunity to lower their property tax bills by filing a tax appeal to challenge their tax assessment.If you think you home assessment is unfair or incorrect, you have until April 1 to file your appeal. To find out if you’re a good candidate for a NJ property tax appeal, you should first have some understanding of how property is assessed in New Jersey and how the appeal process works.Every year, in either late January or early February, tax assessors are required to mail to each property owner in New Jersey, an annual tax assessment notice. It’s typically printed on a small green card and it simply states your home’s assessed value for both the land and any improvements. The number on the card is calculated as of October 1 of the pre-tax year. So, for example, the tax assessment date for 2009 is October 1, 2008. That number, however, is virtually meaningless unless you know what your town’s average tax ratio currently is.Every year, the state Division of Taxation with the help of assessors computes these average ratios by analyzing sales of comparable properties over the prior 24 months. The list of these ratios is published every year, usually right after Christmas, on the division’s website.The Math Involved in a NJ Property Tax AppealTo determine whether your property is over or under assessed, there is some math involved.Have your calculator handy for this part. Every township also gives itself a margin of error which is equal to plus and minus 15 percent of the average ratio. This huge 30 percent sway is the first of many reasons that many appeals are denied. Are houses mis-assessed? Yes. Are they incorrectly assessed by this large a swing? Not very often.For example, the average tax ratio for Town XYZ in 2010 is 88.54 percent. On the low end, the town’s ratio is 75.26 percent and on the high end its 101.82 percent. All these ratios are important to figuring out if your home is assessed fairly. If a home in Town XYZ is assessed at $500,000, the property owner must divide his or her home’s assessment by the average ratio — 88.54 percent — to determine the fair market value of their property, in reality, what the town thinks the property is really worth. In this example, the true value comes out to $564,717.But don’t forget about that margin of error! Property owners should then repeat this same exercise, using the town’s lower ratio and the highest ratio, so they can see the ranges they are dealing with. Using the previous example, dividing their home’s assessed value of $500,000 by 75.26 percent gives you $664,364 and dividing it by 101.82 gives you around $491,063.If the comparable home sales on your block have been selling for less than $491,063 and your assessed value is $500,000, Congratulations! You are a good candidate for a tax appeal. If you win, the township is required to reduce your assessment. Conversely, if all the homes on your block are selling for more than $664,364, you might want to lay low and start praying that everyone else lays low as well. Your home is probably under-assessed. And if you fall in between those ranges, abandon the idea of an appeal. You’ll not only lose your NJ property tax appeal, you could even open the boards eyes to the prospect of jacking everybody else’s assessment up in order to increase revenues. The only plus side to this scenario is that this is how school districts are funded, so if you have kids, they will at least see some of your lost money down the road in better textbooks.Your Supporting Documentation for a Successful NJ Property Tax AppealNot to beat a dead horse here, but keep in mind that most taxpayers that file an appeal will lose their appeal. We already talked about one reason… the margin of error. The second reason is that the burden of proof is on the taxpayer, and most taxpayers fail to present the proper evidence to support their case, and municipalities don’t grant appeals out of the goodness of their heart. They have interests they are obligated to protect just like you.The best evidence a taxpayer can supply in a NJ property tax appeal is recent comparable sales of between three and five other properties of a similar type in your neighborhood. This brings us to reason number three that an NJ property tax appeal is denied: the shortage of recent sales data.Why is there a shortage of sales data, you ask, when you see nothing but for sale signs around your neighborhood? It all boils down to that notice stuck to the front door. Welcome to reason number four that a NJ property tax appeal is denied: estate sales, foreclosures, short sales, sheriff’s sales, etc. are not considered “arm’s length transactions,” in New Jersey and therefore you are not allowed to present those types of transactions as comparable sales data during your appeal. These transactions are considered transactions “under duress” and are generally not considered valid comparable sales.Even with all these hurdles, there will be situations occurring where the taxpayer, after compiling the available evidence and doing the proper due diligence, will have a better than average chance of successfully winning a NJ property tax appeal. The good news is that you can get a pretty good idea of your chances of success BEFORE you are standing in front of the assessment board. Good luck.
Tips For Picking Corporate Event Entertainment
Keep in mind that if you are looking for corporate event entertainment make sure that you go with a company that can serve your company and not get entertainment based upon limited pool of resources. There are some great entertainment groups practically in every area of the country that can supply entertainment to your corporate event.Perhaps one of the first things you should do is specify the kind of entertainment that will work well with your company and not be pigeon holed into a particular type of entertainment that may not reach all of your corporation.Secondly, it is important to take a consensus of your employees. A simple search of your base market will direct you on what type of entertainment will go over well and catch the attention of the majority. This is an important step in considering the type of corporate event entertainment company you are looking to hire. If you have a majority that can not be easily entertained by the run of the mill comedian, then make sure your entertainment headhunter can get something out of the ordinary.Thirdly, which of course has already been thought of, plan your budget for such an event. What type of entertainment and just how much of it are you willing to spend to get for your organization. These are significant considerations especially if you have done your research on your employees and realize that nothing but the best will do for their high quality taste.Last but not least, consider what is the purpose for throwing a corporate event entertainment function. Is it just purely for fun or are you looking to band your company together and improve group relations. This can all make the type of entertainment you choose for the event vary as well. Many high demand entertainers have their own agenda and may not cater if you want a specific theme thrown into the event.In all aspects of business it pays to do your homework before you outsource and in the area of corporate event entertainment it is just as crucial. Taking the tips to acquire the right type of entertainment your corporation will leave the entertainment function refreshed and focused on whatever your goal is in mind for the event. This can be a multi-faceted event base around entertaining and growing your company in different areas with the right form of delivery.
The Three Killers of Misunderstanding Investing
An annual delight of mine is reading Warren Buffett’s annual letter to shareholders. Buffett has very much influenced me as a financial advisor and how I manage investments. In this year’s letter he writes, “Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power – after taxes have been paid on nominal gains – in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date.”Whew, it brings tears to my eyes. Each time I meet with a client, I always try to reframe the concept of “money” and “investing”. Money is all about purchasing power and it’s all about buying things at some point in time. It’s laughably simple, but to me I can think of no other concept that common investors miss. Here are three implications of missing the concept:1. Responding to volatility – It is human nature to run from scary things. Each time the market goes down, investors panic out of the market. In my opinion, the only time an investor should take his or her foot off the gas pedal of investing is when they have decided that it is time to buy things in the near term. Otherwise, all sails should be up, your hand should be on the helm and you should ignore the reports of monsters in the waters or that you’ll sail off the edge of the world. If you think about when the money you have invested will actually buys things, the answer is often not in the foreseeable future. Naturally it’s different if you are living off your investments in the present time particularly if you are in long term care rapidly draining them down, but this answers the important question of when you are going to buy things. Volatility must be looked at as only that: volatility. Volatility is simply the price of admission that you must cope with in the task of seeking to outpace inflation. Historically, speaking of the broader capital markets, volatility has never ended up being a long term risk.2. Being irrationally conservative – If an investor embraces the concept that you are taking an amount of money that has purchasing power, investing it in something and that when it is done it will have a different purchasing power afterward, then he or she would probably keep as little money in cash equivalent investments as possible. I think it’s always important to assess how much cash somebody needs to have on hand, but then to highly discourage having anything more than that figure. I have no idea why somebody would get a CD for money that they are not likely to spend in their lifetimes. If somebody gets a $100,000 one-year CD earning 0.50% when inflation is 3.00% in essence they’ve lost 2.5% or $2,500 at the end of the term. If each year this was sent as a bill, I have a feeling people wouldn’t do this as much as they do. Elsewhere in the Berkshire annual report, Buffett notes that since 1965 the dollar has fallen by 86%! It takes $7.00 to buy what $1.00 bought back then. Investors who are earning a rate less than inflation are kidding themselves if they think that they any portion of that interest as “income”. And to turn the knife, that “income” is usually fully taxable. Cash is like oxygen, you want a little around you to breathe, but anything beyond that should be promptly deployed.3. Jumping into Bubbles – This type of investment shows the ugly side of supply and demand. Sometimes an investment will increase in price only because of an expanding pool of buyers and not because the investment is increasing in value. There will be a group of buyers in an investment. More are attracted to that pool not because of the investment, but only because they believe that the buying pool will expand further. The investors are not investing because of what the asset will produce (usually the asset is a zombie from a rational standpoint), but rather because they believe that in the future other investors will desire it even more. The essence of a bubble is that it doesn’t have to do with the investment itself and that there isn’t anything to numerically justify it, it’s all about expecting future buyers of the asset. To me, gold is a bubble. It is a zombie asset and the only thing driving the price is the hope that in the future somebody else will come along who will buy it for more than what you bought it for. This isn’t investing, it’s speculating. If you were given one ounce of gold when you were born, when you died you would have… one ounce of gold. The cruel experience is that investors usually see prices rise and it justifies their investing hypothesis – at least for a while. As a financial advisor, there’s no shame in telling people they shouldn’t invest in something based on principle and then to see the prices of that investment rise afterward. There’s no shame in being temporarily wrong.I think that when investors seek to denominate their money in a manner which orients it around the reality that people purchase things now and in the future, then they are likely to let go of their primitive fears that cause them to do foolish things. 5 years, 10 year, 50 years, 100 years from now humans will consume more than they do now. When you have money denominated (or invested) in a stock, it is a piece of a company that in the natural flow of business will raise its prices along with seeking to expand its sales (which all things equal, should happen simply by population growth and also perhaps by the emerging consumers across the globe). Some investments are designed to keep up with rising prices, others are not designed that way.There are strategies that compliment this, but before investing you have to embrace that it’s about purchasing power and guarding that. Secondly, that if you aren’t exercising your purchasing power (otherwise known as buying things), it’s unlikely that you have any rational reason to cash out your investments. History has taught us that this approach consistently works so long as people don’t let their emotions take the helm.
Why Vaccinations Are Important Before Travelling
If you are planning to travel outside of the United States, oftentimes you are strongly urged, if not required to get vaccinations. Bringing an unwanted traveler with you, like a cold, on vacation or a business trip, sounds pretty terrible. Bringing a potentially deadly disease back home with you is much worse for you and potentially your family or community. This is why it is so important to do your research and get your vaccinations before you travel.We see news reports all the time about pandemics in other countries. By receiving vaccinations, you decrease your vulnerability to getting seriously ill. Be sure to speak to your doctor about where you are going, the length of time for your stay, and your predominant activities like whether you will be in an urban area, outdoors sightseeing, or eating local cuisine. Below are some countries and what to be aware of.AfricaIn most parts of Africa, the concerns for disease are no more so than other countries where there is a risk of Hepatitis A and Typhoid due to contaminated food and water, Malaria if you are in a high mosquito area, and Yellow Fever. Not as common but a risk nonetheless are Polio, Hepatitis B, and Rabies. One thing to note is the “meningitis belt” located in the sub-Saharan area of Africa. There is a significant risk of meningococcal meningitis in this area, transmitted from person to person through respiratory secretions (coughing or sneezing) and saliva.The BahamasHepatitis A and Typhoid are possible diseases that you may incur when visiting The Bahamas, depending on where you stay. The root cause is generally from contaminated water or food, especially in rural areas or if you plan to eat native foods.ChinaIn addition to your routine vaccinations, Hepatitis A and Typhoid are the most common concerns when visiting China. Additionally, Hepatitis B, Encephalitis and Malaria vaccinations may be considered depending on your travel plans. If you are planning to visit the Xinjiang province, the Polio vaccination is recommended, especially if you are doing any kind of humanitarian work.EuropeMost of the European countries, which include the United Kingdom, Ireland, France, Germany, Switzerland, and Norway, have risks for Hepatitis A and B, as well as rabies. Speaking to your doctor will alleviate any concerns for potential health risks.IndiaThe most common afflictions when visiting India are Hepatitis A and Typhoid, most commonly associated with ingesting contaminated food or water. Other maladies may include Hepatitis B, Malaria, or Encephalitis. There is also a chance for rabies because of the wild dogs, bats or other mammals.MexicoIn addition to the possibility of food and water contamination that may afflict you with Hepatitis A, Hepatitis B or Typhoid, Malaria is common, especially in warm and moist climates where mosquitoes are prevalent.South AmericaBefore visiting any of the countries in South America including Brazil, Colombia, Venezuela, Peru and Panama, you should speak to your doctor about your travel plans and intentions. Hepatitis A and Typhoid are most commonly associated with traveling in these areas. Additionally, Hepatitis B, Malaria, and rabies are a risk, as is Yellow Fever.As with any travel outside of the United States, be sure to do your research. Speaking with your physician approximately four to six weeks prior to your trip is always recommended. Get your vaccinations and all medicines to assure yourself the best health during your travels, and prevent any unwanted disease from following you home.