As a taxpayer, a successful property tax appeal may only be the first step in an ongoing battle to keep a property’s assessment under control.  Suppose you succeed in obtaining a judgment lowering your assessment, and the property tax bill that goes along with the lower assessment.   What is to keep the municipality from simply increasing the assessment of your property again year after year, even though the value has not really changed?  Sure, the County Board or the Tax Court may have sent your town’s assessor the message that your property’s assessment was too high, but how can you make sure that the assessor gets the message next year and the year after without having to pay for another appraisal and file appeal after appeal? 

Thankfully, the New Jersey legislature has an answer in the form of two statutes designed to protect taxpayers from repeated litigation, once a reduction in a real property assessments has been achieved.  These statutes are commonly known as the “Freeze Statutes” or “Freeze Act.”  Generally, once a final judgment has been entered by the Tax Court or the County Board regarding a real property tax assessment, and that judgment is binding and conclusive on all parties (including the municipality and municipal tax assessor) the Freeze Statutes act to continue the effect of the Tax Court or County Board of Taxation judgment for that tax year, and up to two succeeding tax years.  N.J.S.A. 54:51A-8 provides in part that:

Where a judgment not subject to further appeal has been rendered by the Tax Court involving real property, the judgment shall be conclusive and binding upon the municipal assessor and the taxing district, parties to the proceeding, for the assessment year and for the two assessment years succeeding the assessment year covered by the final judgment, except as to changes in the value of the property occurring after the assessment date.

A parallel provision in N.J.S.A. 54:3-26 has the same effect for County Board decisions.
 

Under these statutes a property owner/taxpayer is protected from having to constantly re-appeal the tax assessment to defend against annual reassessments.  Generally, once you are successful in appealing one assessment, you should not have to worry about the expense of another appeal for the next two tax years. 

Of course, the Freeze Act does not guaranty that you will not be returning to the Tax Court or County Board next year, and there are always exceptions to every rule.  As a taxpayer you do have the option to waive the freeze and file an appeal for otherwise protected years if you believe that further savings might outweigh the additional costs of further litigation.  Additionally, there are certain limited situations where the municipal assessor can change your assessment in spite of the Freeze Act, but if done improperly a taxpayer can recover attorneys fees and even the cost of its appraisal.  However, even with the exceptions the Freeze Act can be an important tool to protecting your hard fought property assessment victory for several years to come. 

What if the Municipality Reassesses Frozen Property?

While the Freeze Statutes can protect a taxpayer from reassessment for two years after a successful judgment, there are exceptions.  First and foremost, if the actual value of the property changes after the prior assessment date (October 1 of the pretax year), the assessor can file an appeal and attempt to show that the frozen property’s value has increased more than the general rate of increase for the municipality.  In that case, the municipality has the burden of proof in showing that the new assessment is reasonable.  This normally requires a physical change to the property (for example newly constructed improvements), however in some instances courts have held that certain external changes could allow reassessment despite the Freeze Act.  Some notable examples include the construction of a large shopping center near the property (see Wayne Tp. v. Robbie’s, Inc., 118 N.J. Super. 129 (App.Div.), certif. den. 60 N.J. 351 (1972)), and the 1976 Constitutional amendment permitting casino gambling in Atlantic City (see Cumberland Arms Associates v. Burlington Tp., 10 N.J.Tax 255 (citing as example)).  Next, if the property has an addition that qualifies as an added assessment, goes through a condominium (or co-op) conversion, has a zoning change or is subdivided, the Freeze Act protections also can go out the window and the municipality may reassess.  Finally, if there is a complete revaluation of all property in the municipality, the Freeze Act no longer applies for that tax year. 

If the property’s assessment is increased during the freeze period, the municipality has the burden of showing that the assessor acted reasonably and if the Tax Court determines to the contrary, the Freeze Act provides that the Court shall then award attorneys fees, the cost of the taxpayer’s appraisal and other costs, to be paid by the taxing district. 

Your Options After an Appeal: Take the Freeze or Pursue another Appeal

In some limited situations, a taxpayer may actually seek to waive the protections of the Freeze Statutes and pursue tax appeals for the two tax years otherwise frozen by the Act.  As with any other decision made concerning the assessment of your property, the implications of the Freeze Act should be reviewed with legal counsel to ensure that the risks of waiving the freeze are fully balanced with the potential upside of a further reduced assessment for the otherwise frozen tax years.