SOUTHAMPTON TOWNSHIP
FAIR MARKET VALUE PROGRAM
A Town Wide Revaluation Effective July 2003
Property in Southampton Township has, like many towns across Burlington County, benefited from a good deal of value appreciation in recent years. Vacant land, farmland, commercial and residential properties have all increased in market value. The evident benefit is the gain in equity for any property owner. Whether realized in resale or borrowing power, these are advantages to being a homeowner during the current real estate market.
But the perspective from the Tax
Assessor’s office is a bit more wide ranging.
It is incumbent upon the assessor to not only track market value, but to
utilize it by assessing all real estate according to market value. In fact, it is a legal mandate for this
process to occur and has been defined in the New Jersey state constitution. “ …
Ad valorem”… or at value is the standard established by statute
for tax assessments in New Jersey. And
the standard must be applied on a town wide basis as opposed to a property-by-
property basis. A single property
assessment cannot be raised simply because it sold for more. As the real estate market continues to
appreciate the town can easily reach a point when a formal order is issued by
the County Tax Board to perform revaluation.
It is best to avoid such a situation since it would present the town
with less control, a compressed time line and exorbitant cost.
This brings us to the Southampton
Township Fair Market Value Program. Designed
and coordinated by the local tax assessor, this in-house project is well suited
to Southampton. Rising market value versus static property
assessments gives rise to inequities in tax bills. New homes begin paying a
slightly larger share of the tax burden and older homes, at times, will pay
less than a fair share. Substantial
commercial properties as well as vacant land can also end up not paying a
proportionate share of the property tax.
Assessment performance is tracked and
measured by the New Jersey Division of Taxation. The assessment to sales ratio is a percentage calculated
and reported annually by the Division of Taxation. This percentage plays a critical role in Southampton’s share of
the Lenape Regional school budget and the County budget. The effect of a falling ratio is that
Southampton starts shouldering a disproportionate (larger) share of both those
budgets. Maintaining a high ratio
though ensures that the township share is lower and fair. The tool used to bring a falling ratio up is
a town-wide revaluation. Adjusting all
property assessments so that they reflect fair market value initiates a
re-calculation of the ratio and once the new higher percentage is applied the
district generally will see their portion of regional school and county budgets
favorably adjusted.
Finally, it is a sure bet that once
the town ratable base has been revised to reflect market value the tax rate
will drop. An accurate inflation of
ratables means a deflation of the tax rate.
Once applied to individual property assessments this new rate usually
means a drop in tax dollars paid every quarter. New tax bills utilizing the revaluation are due July 2003.
A fair market value program is certain
to result in all of these benefits, but such a massive project is bound to
produce some fiscal surprise. Indeed
there are pockets of properties throughout the township that are so very
undervalued that a fair assessment will increase the tax bill. By my estimation no more than 30% of
Southampton properties fall into this category.
All residents should take comfort in
the fact that Township Committee saw fit to endorse my proposal for
revaluation. In doing so now the
overall fiscal impact is minimized… a lower percentage of properties will see
higher tax bills. Control over the
project is in-house thereby removing the need for an outside firm. Cost is reduced substantially. And Southampton’s property tax payers have
constant direct access to the assessor’s office. Any one having revaluation jitters is urged to speak with me
directly. The office number is
859-3235 and all questions will be answered.
* * *
Over the coming months
property inspectors will be sent to all neighborhoods throughout the
township. Three gentlemen, qualified to
collect this data, have been hired by the Assessor’s Office. Bruce Leff, Cliff Lewis and Glenn McMahon
may present themselves for your permission to do a property review. All will have a Southampton Township photo
identification badge and an authorizing letter from the Mayor.
Your cooperation and
assistance is very greatly appreciated.