Each year, a municipality must calculate its tax rate. The entire municipal budget for the year is divided by the entire assessed value of all the properties in the municipality to get the tax rate. The effective tax rate can also be calculated by multiplying the tax rate by the ratio for the municipality.
However, this rate is not usually determined until September or October of the Tax year. For example, the 2013 Tax rate wasn't known in most municipalities until the third quarter of the year. So the town uses an estimated tax rate usully based on the 2012 rate for the first 3 quarters, then the fourth quarter is adjusted to make up the difference of the two rates. It is usually adjusted higher, since the tax rate in most municipalities goes up slightly every year.
But this isn't the end. The first and second quarter tax bills of 2014 are often also estimated bills, usually based again on the 2012 tax rate. So the new tax rate for 2013 often doesn't fully apply until the third quarter tax bill of 2014.
If you filed a successful tax appeal in 2013, the savings for the year are usually applied to the fourth quarter. Whatever amount you overpaid in the first three quarters is applied as a discount to the fourth quarter. Sometimes the fourth quarter is not adjusted, but rather the full amount which was overpaid is refunded shortly after January 1 of 2014. Often the first and second quarters of 2014 are not adjusted to reflect the new, lower tax bill, so the savings from the 2013 reduction in assessment for the year 2014 are sometimes not applied until the third quarter of 2014, in which case it becomes part of the quarterly tax bill. Often the fourth quarter tax bill is sent to the taxpayer before a judgment is issued in their appeal, and a new corrected bill must be requested from the tax collector.
If you pay the property taxes through a mortgage company and successfully appealed your tax assessment, the date the reduction is received depends on your agreement with that company. Some clients have gotten checks in the mail from their mortgage companies as early as the fourth quarter of 2013, but others have had to wait until 2014 for the morgage company to refund their overpayment. I always advise clients to send their mortgage company a copy of the County Tax Board Judgment as soon as it is received, to ensure that their mortgage company is aware of the reduction as early as possible and thus avoid even greater delays in receiving the reduction.
If you have any questions about your tax bill, or your potential for a tax appeal, please call DePaul Law Firm at (973) 376-8585.