It’s too late for a tax appeal this year, but next year will be here soon, accompanied by even lower real estate values. Tax appeals have reach record numbers in NY City, the Rust Belt, Arizona, Florida, California and New Jersey.

          “We’ve been absolutely getting killed,” said Robert W. Singer, the mayor of Lakewood Township, N.J., and a state senator, whose town is setting aside $2 million to pay tax refunds to homeowners. “We’ve never had this before. Usually they’re undervalued. Now, everyone’s overvalued.”

          Zoning restrictions and homeowner associations add to the decline in value because they limit the options a new purchaser has. If you are maxed out on your lot coverage, and you have a nice comfortable home with a beautiful barn and guest house, but your potential buyer wants to add a wing onto the existing house and is prohibited from doing so. You just lost a sale.  If the reason the purchaser wants the property is to stable his horses, and the barn burns down and cannot be rebuilt because the property is a preexisting non-conforming use and it already exceeds the allowable coverage, the new purchase is likely to be turned off and walk away. These are some practical considerations that may not have been considered in a general reassessment. While the assessor may not have taken your circumstance into consideration, you can be sure that the potential buyer will.

          The commercial real estate market is now showing signs of stress. Main Street business are closing and shopping malls are papering over vacant store windows as unemployment rises and consumers are unwilling to spend knowing that they may be next in line to receive pink slips. The next wave of tax appeals will be devastating to the tax base of communities that rely upon soaking commercial real estate owners to support public projects.

          Tax appeal experts are canvassing whole developments to add to the number of tax appeals. It’s an epidemic in states with high taxes. New Jersey has the dubious distinction of being one of the, if not the highest state in the in the nation for real estate taxes.