Tax Revaluation Could Shift Property Tax Burden In Chatham

CHATHAM, NJ — The recently completed revaluation of Chatham Borough homes may result in a shift in some residents' third-quarter property taxes.

The revaluation increased ratables by 45 percent, amounting to $975 million, which will be reflected in the 2023 tax bill.

At the April 10, borough council meeting, Chatham Borough Chief Financial Officer Karen Fornaro gave a brief overview of how the revaluation affected the municipal tax rate.

While presenting the budget, Fornaro disclosed that this year's property tax calculation for the municipal budget was more complicated to calculate due to the revaluation.

"As you add assessed values, your tax rate goes down. You'll see our municipal tax rate may be going up five percent, but our actual tax rate is going down 28 percent. It's really hard to tell... where that lands your home," Fornaro said.

Council member Jocelyn Mathiasen, who serves on the budget and finance committee, questioned how the tax bills would work this year, keeping in mind the changes with the revaluation.

Many borough officials emphasized when the revaluation process was first announced that it does not imply that all residents and business owners will face higher property taxes; rather, the new tax rates are based on borough-wide averages. Because of that, this year, the amount by which each resident's taxes rise, fall, or remain relatively flat will vary.

In Chatham Borough, residents are billed based on last year's taxes for the first two quarters, so this year's tax bill may look different for some homeowners.

For example, a home valued at $690,000 in 2022 that was revalued 40 percent higher to $966,000 will see a $212.87 reduction in taxes overall.

"A lot of people's taxes are going to swing quite a bit in one direction or another. By the third quarter there will be a huge correction," Mathiasen said. "People whose valuation went up by significantly more than say 45 percent may get a big surprise in the third quarter, and then people who were below the average might find that they already paid the bulk of their taxes for the year."

According to Fornaro, the combined tax rate has decreased from.425 in 2022 to.306 in 2023.

Residents will be able to calculate their portion of the municipal tax bill using a simple calculation based on their current house assessment, according to Fornaro.

To get an estimate of their municipal tax amount, a resident would take their final assessed value, multiply it by $.306, and divide it by 100.