When some properties are under-assessed, it forces tax rates to be raised at both the local and county levels in order to fund governmental operations. The owners of these expensive homes are not doing anything improper. It's not their job to set their property's assessment. That's up to local tax assessors. The state Constitution requires assessments to reflect fair-market value.
Assessments are an assessor's best guess as to what a property is worth.
Press reporters added up the assessed value of homes that sold for a million dollars or more in each New Jersey municipality, then checked to see how close those total assessed values were to sale prices. In most of those towns, million-dollar properties as a group were assessed at a lower percentage of their selling prices than were other homes. In fiscal 1997, owners of million-dollar properties were assessed at a lower percentage than everyone else in 35 of 42 towns. In fiscal 1998, owners of high-end properties got such a break in 49 of 57 towns. As a group, they were assessed at 85 percent of their selling price.