Holmdel Property Tax Increase?

Holmdel’s 2022 Final/2023 Preliminary Tax Bills were mailed earlier this week. Some long-time residents are dismayed to find that their assessment and/or tax may have jumped significantly.

Why? The answer may be complicated.

Historically, home values are reassessed in person by an assessor every ten years. While homeowners can always appeal their assessed value, this old system provided for some assessed value stability.

The current program, called the Monmouth County Real property Assessment Demonstration Program (“ADP”), was first introduced in 2013. With the advent of real estate sales and databases through the internet, this new program called for an annual assessed value.

The theory is that by keeping individual property assessed value current, it eliminates problems with the old system where assessment does not capture differences in appreciation in different parts of a town and that some homeowners’ taxes might be stagnant for a decade and the experience a huge jump under a new assessment. Monmouth County was the first to introduce and is believed to be the only county in New Jersey that uses this annual assessed value system.

However, the new program appears to have introduced more fluctuations in individual cases depending on recent neighborhood sales. In addition, New Jersey Tax Court Judge Mala Sundar wrote in 2021 that “[t]here is nothing in the record to establish that the annual reassessments actually result in all properties being brought to 100% of market value, or that there is any meaningful oversight to ensure that this is the case.”

Keep in mind that our property tax is ultimately based on the amount of tax levy needed. The tax rates are calculated annually to collect the amount of taxes determined by various entities that include Monmouth County, Holmdel Township, and Holmdel school district.

According to the Frequently Asked Questions (“FAQ”) and other informational sheets that were included with the tax bill, 68% of our property taxes go to the Holmdel school district, as determined by the BOE, 19% goes to Holmdel Township (including the 2% open space tax) and 14% goes to Monmouth County. The FAQ also indicated that school taxes increased by 8.3% over the past 6 years while the Township tax (exclusive of the open space tax) increased by 2.1%.

We have previously written that these numbers should be read and interpreted carefully after more analysis. See https://betterholmdel.wixsite.com/home/post/holmdel-taxes-the-whole-truth

While the Holmdel Township tax levy is relatively flat, it did benefit in past years from a windfall in construction fees (before COVID) and PILOT payments. The school budget is impacted by the 2017 $40 million referendum that was designed to upgrade academic, athletic, and arts infrastructure. However, the BOE did get a windfall of around $1.5 million in 2021 but chose to reduce their tax levy by only around $250,000. This is, effectively, a tax increase of more than $1 million.

Over time, these components (Township and BOE budgets) are what drive our property taxes.

Meanwhile, what can you do if you get a sticker shocker from the new tax bill? Look and verify the information on your Property Report Card (“PRC”) via the Monmouth County Tax Board. See the link below.

https://taxboardportal.co.monmouth.nj.us/taxboardportal/home/login

Look at recent sales for the past year in your neighborhood and find "comparable” sales to see how your assessed value compares with these comparable sales. You can submit questions and supporting documents (pictures, maps, narratives) regarding the future property assessment.

Ultimately, you can, of course, file a formal appeal. You need to understand the process but it’s not hard. The Office of Tax Assessor may be a good place to begin.