Assessed value is not always equal to the market value of property because the assessor doesn’t come around every year, and real estate values go up and down. The State of New Jersey compares the actual market value of real estate to the assessed values of properties in each town and provides each town a certification of the ‘average ratio of assessed to true value.’ Using this certified ratio, one can calculate the ACTUAL property taxes paid on three homes with the same market value in Clinton, Raritan, and Readington.
The table below shows that while Readington’s tax rate is higher, the actual tax bill is lower.
|Township ||Market Value* (Estimated value based on comparable sales) ||Assessed Valuation (The figure used to calculate taxes) ||Certified Ratio* (Assessed Value divided by Market Value) % ||Tax Rate (Tax per $100 Assessed Value ) ||Property Tax Bill |
|$420,000 ||$360,234 ||85.77%||$2.72 ||$9,802 |
|Raritan Township||$420,000 ||$434,028 ||103.34%||$2.31 ||$10,043 |
|Clinton Township||$420,000 ||$411,138 ||97.89%||$2.49 ||$10,246 |
Township Committeemen Broten and Tropello claim the Readington tax rate is higher than other towns and imply that your property taxes are higher. They also imply that the reason for the higher rate is debt for open space and excessive litigation costs related to preserving the airport in order to persuade residents to give up the effort to block airport expansion.
Tax Rate Is Not The Only Factor In Determining Your Property Tax Bill
Picking numbers out of context is very misleading. Unlike your federal or state income taxes, tax rate is not the only factor determining your property tax bill. In fact, while Readington’s 2014 tax rate is higher than the tax rate in Clinton and Raritan, Readington's tax BILLs are lower. And that, after all, is what matters.
Property taxes are calculated according to the following equation: