Tenants’ Temporary Structures Found As Taxable Real Property

by: Anthony F. Della Pelle
29 Jun 2012

In a recent unpublished opinion, a Tax Court judge considered an in limine motion seeking to bar the report and testimony of the Township of Belleville’s appraisal expert as lacking a credible factual basis.  The property owners filed complaints challenging the assessment on their real property in Belleville for tax years 2008 through 2010.  The property owners argued that Belleville’s expert improperly deemed two trailers and one Quonset Hut on their property owned by tenants as taxable real property instead of exempt personal property.  Additionally, they argued that the expert improperly designated the attic in their single-family home as another bedroom when it is an unfinished space used only for storage.

The court found that, pursuant to N.J.S.A. 54:4-1, the trailers and the Quonset Hut are taxable as real property, and that plaintiffs failed to present sufficient evidence to qualify for an exemption under either N.J.S.A. 54:4-1(a) and (b).  Under N.J.S.A. 54:4-1(a), personal property is exempt from taxation if it can be removed without material injury to either the real or personal property, and it is an item not ordinarily intended to be affixed to real property.  Under section (b), property must be machinery or apparatus or equipment used in the conduct of business.  The court’s holding specifically found that the trailers and hut qualified as taxable structures because they had utility connections, housed people and equipment, and that no evidence was presented as to what effect the removal of the structures would have on the property.  Finally, the court deferred its decision on the attic issue for a later hearing.

For more on property tax cases focused on expert testimony and report issues, or lack thereof, please see the following blog posts:

Experts’ Opinions on Golf Course Valuation Not Up to Par

Apples and Oranges? Another Tax Appeal Dismissed

Expert’s “Gut Feeling” Survives Dismissal Claim