New Jersey law presumes that the assessed value of real property is correct, so the burden of proving the assessment wrong is on the taxpayer. There is a process in place to file a tax appeal to request a lower assessment; wherein sufficient relevant, credible evidence must be presented to convince the Tax Commissioner that a lower value is justified. The core evidence needed to back up a tax appeal is data on comparable sales of similar properties in the same or similar neighborhood. The more similar the characteristics of comparable properties to the subject property, the better they will aid in the appeal. Comparable properties are determined by value-contributing amenities such items as: lot size, building size, garage, finished attic or basement, number of stories, pool and age of building.
With regard to the actual comparable sales data, the sale must meet the requirements for a "fair market sale," meaning a sale between a willing buyer and seller in an arm's length transaction. Further, the sales must have been publicly advertised; examples of sales that do not suffice as evidence of market value include most foreclosures, sheriff's sales and short sales. Up to five comparable sales may be used; however, quality is better than quantity, so two or three highly comparable sales may suffice.
New Jersey property tax list information can be accessed by the public via an online search form; however, searching this way is cumbersome and inefficient. Further, this method of data acquisition is unsuitable for the professional audience, such as attorneys who use the data to prospect for property owners who may not be aware that they qualify for a decrease in tax assessment.
The New Jersey tax assessment system is an "ad valorum" system, which requires property to be assessed "according to market value." New Jersey has 21 counties comprised of 566 municipalities, and nearly every municipality has its own local tax assessor. Property tax assessments happen about every 10 years, so an "equalization" process was developed to adjust for fluctuations in the housing market since the last assessment was done. In an effort to establish equity within both municipal and county borders, each municipality is assigned an "equalization ratio" that is based on a determination of the "ratio of aggregate assessed to aggregate true value." A property's assessed value is adjusted by the equalization ratio for that municipality to generate the property's "real value." Equalization ratios are updated annually.
There are 21 counties in New Jersey; this project will focus on Essex County, one of the counties closest to New York City. As of 2015, Essex County's Census-estimated population was 797,434. There are 277,745 households in the county, and 45.2% of all housing was owner-occupied (2010-2014) with a $358,100 median value of owner-occupied housing units. Essex County is one of the most economically polarized counties in the US, with both some of the poorest and richest ZIP codes.
To satisfy the project requirements, an interactive search tool was created using R and Shiny. The original Essex County, NJ property tax dataset contained approximately 189,000 records; when cleaned and filtered, the dataset was culled to about 8,100 records. These records are completely searchable using search fields or sliders for each column. To analyze the main data trends, two visualizations were created using the ~8,100 records. The first, a choropleth map, visualizes the mean assessed value of residential housing in Essex County, NJ, by municipality. The map clearly represents the vast economic polarization described above. The second, a bubble chart, visualizes the residential properties in the county by mean sale price, year built and size (square footage). This chart also clearly represents the economic polarization of Essex county, where the less affluent communities contain older homes, with lower sale prices.