If you own property in New Brunswick, a recent decision from the New Jersey Tax Court has just cleared the path for potential property tax savings in 2026.
In an unpublished opinion, Judge Cimino ruled against the City of New Brunswick’s attempt to alter its Chapter 123 Ratio, keeping the figure where the Director of the Division of Taxation set it. While New Brunswick sought to have a sale excluded from the Director’s ratio study that would have caused the Chapter 123 Ratio for the city to increase by over 4 percentage points, the judge ruled that New Brunswick had not produced sufficient evidence to prove that the Director had acted unreasonably in including the sale in the study.
Let’s break down the tax court’s ruling below.
Is Your Property Fairly Assessed?
How Is Chapter 123 Ratio Determined in New Jersey?
Each year, the Division of Taxation reviews all property sales within a municipality to identify “arms-length” transactions. Arms length transactions are those where the fair market sales accurately reflect property values. These sales are then used to determine the town’s ratio of assessed value to true market value.
For example, if an office building sells for $1,000,000 but carries an assessment of $600,000, the ratio for that specific sale is 60%.
The Director looks at all such sales and assigns them usability codes to ensure only valid market data is included. The sales which are usable are then used to determine the Chapter 123 ratio for each municipality. This determination is made using a complicated formula that averages in multiple years of sales.
Why is the Chapter 123 Assessment Ratio Important for Tax Appeals?
In order to be successful in a tax appeal, a party must show that their property is over assessed, i.e. their property is worth less than a certain value. This value is calculated using the Chapter 123 ratio and applying a 15% margin of error to the property. For example, when we say the Chapter 123 ratio in New Brunswick, NJ is 69.61%, it means that a property assessed for $500,000 implies a value of $717,287. The 15% margin of error applied to the 69.61% gives a value of 80%. Applying this number to the $500,000 gives a value of $625,000. To get a tax reduction, the taxpayer must show the value of the property is less than $625,000.
As the Chapter 123 ratio goes up, the value for the margin of error goes down. This ruling now makes it easier for New Brunswick taxpayers to appeal their taxes.
Why Would New Brunswick Appeal Its Chapter 123 Ratio?
There are two primary reasons why a municipality might challenge its assigned ratio:
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A higher ratio makes it much more difficult for property owners to successfully appeal their assessments; and
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A lower Chapter 123 ratio increases the amount of county tax a municipality must pay.
To determine each town’s share of the county budget, the state divides the total local assessments by the ratio. If a town has a lower ratio then the number goes up, placing more burden on the municipality.
Why is New Brunswick’s Ratio So Low?
As of January 2026, New Brunswick has not done a revaluation or reassessment since 2017. In New Jersey, as market values rise, the assessment ratio naturally declines if the city’s assessed values remain stagnant. The post-covid spike in home prices caused ratios to fall faster than normal. Because New Brunswick is still using 2017 assessment data, the ratio has dropped faster than historical averages.
How Wolf Vespasiano Maximizes Your New Brunswick Tax Appeal
The current market environment in New Jersey has created a unique tax situation. Home prices have risen much faster than commercial properties, meaning that the ratio better reflects homes than commercial properties. In other words, hotels, offices, apartment buildings, and other commercial properties in NJ are uniquely positioned to take advantage of a tax appeal.
Don’t wait until the 2026 tax bill arrives to realize you’re overpaying. The attorneys at Wolf Vespasiano are experienced litigators who know New Brunswick and its players. We can help you ensure that your property taxes are fair and that you are not paying more than you need to. Contact us today for a free analysis and to discuss your options.
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