State is deeming distressed properties as legitimate sales.
Gloucester Township Council passed a resolution to file a tax appeal for the 2018 Director’s Ratio issued by the state. Council is hoping to exclude vacant or distressed homes from the ratio, otherwise it could lose tax appeals from residents who could use these “distressed sale” homes as comps.
On Oct. 1, the state’s division of taxation released this ratio for the 2018 tax year, which was calculated to 100.7 percent.
The appeal will dispute these findings to the tax court by Jan. 1. The appeal challenges the state court’s upholding of the true definition of a “distressed sale.” If certain properties are, in fact, vacant or distressed homes, they should not be counted toward the ratio, according to the township.
The issue can come into play with tax appeals and the distribution of school aid if distressed properties are considered “legitimate.”
The township is hiring Wade Long, Wood and Long, LCC to file the appeal.
The ratio, which is a configuration of assessed value to true value of real estate, determines the township’s share of the county budget. The ratio is used to calculate and distribute state school aid. Equalization values are also the basis for apportioning county taxes among local taxing districts and for apportioning the tax cost for a large number of regional school districts among component taxing districts, according to the state Department of Treasury.
Council aims to receive a fairer percentage, so it doesn’t overpay, as Gloucester Township has several distressed and abandoned properties the state is qualifying as “legitimate sales,” which affects the township’s ratable base.
In particular, there is a distressed group of sales, encompassing six properties in Gloucester Township the state is deeming as legitimate, according to Tax Assessor Chuck Palumbo. The sales are 40 percent below the the market value, according to Palumbo.
“The idea is to classify them as, what the state should be calling them, as ‘non-usable’ sales,’” Palumbo said.
If the appeal is not successful, the properties could become “comps,” which are properties with characteristics similar to a subject property whose value is being sought.
“Right now, those distressed sales are not usable (comps,) when (people) want to appeal their taxes,” Solicitor David Calamere said. “Now, if that’s allowed to stand, when people come in to appeal their taxes in Gloucester Township, if they’re using those properties, they would be considered legitimate properties.”
If the township does not win the case, this could redefine the state’s requirements of a “distressed sale.”
Aside from township council, residents also voiced concerns about foreclosed homes throughout the township at the Oct. 23 council meeting.
In other news:
• Three teams encompassing the Gloucester Township Hockey Alliance, Beaver A, Cadet A and Penguin C, were recognized by council for clinching titles.
• Council passed a resolution authorizing changes in the scope of work to be done in completing the Cherrywood Improvement Program, revising contract costs from $236,800 to $206,463.85.
• Council granted permission to the Blackwood Fire Company to conduct its annual Christmas parade, set for Dec. 2 at the Blackwood fire Company, located at 14 W. Central Ave.
• On Nov. 12, Bethel Christian Church will host its annual Thanksgiving dinner at Highland High School.
