The Chapter 123 Test and the Common Level Range

Most New Jersey assessments are not 100% of market value — they sit at a fraction of it, and the fraction varies by district and drifts between revaluations. Chapter 123 is the statute that turns that drift into an owner’s protection: each year the Division of Taxation certifies an average assessment ratio for every taxing district, and the common level range is that ratio plus or minus 15%. The Division’s own appeals page states the rule: to prove an assessment excessive or discriminatory, a taxpayer shows it does not fairly represent the True Market Value Standard or the Common Level Range Standard.

The two standards, and what each one asks

• True Market Value Standard: the conventional argument — your assessment, divided by the district’s average ratio, implies a market value above what the property is really worth. You prove it with market evidence: comparable sales, an appraisal.
• Common Level Range Standard: the Chapter 123 argument — your assessment is outside the ±15% band around the average ratio, which makes it presumptively excessive or discriminatory regardless of market value. The remedy is automatic: the assessment is adjusted into the range.

This is a different shape of argument from anything else on this site. In Texas or Florida you prove a value; in New Jersey, under Chapter 123, you can win by showing the ratio arithmetic puts your assessment outside the band — no opinion of your property’s market value required.

Worked example (illustrative)

Illustrative arithmetic with made-up round numbers — your district’s certified ratio and your own assessment control.

1. Inputs: your district’s certified average ratio is 35%; your assessment is $180,000; your home would sell for about $440,000.
2. Step — the band: the common level range is 35% × 0.85 = 29.75% to 35% × 1.15 = 40.25%.
3. Step — your ratio: $180,000 ÷ $440,000 = 40.9% —above the 40.25% top of the band.
4. Step — the remedy: outside the band, the assessment is presumptively discriminatory and gets adjusted down into the range — to at most 40.25% of market, about $177,000 here, with the hearing evidence fixing the final figure.
5. Contrast — an inside-band case: if your assessment were $160,000 (36.4%), Chapter 123 would do nothing — inside the band, the only winning argument is market evidence that the value itself is wrong.

What this tells you: before collecting a single comparable sale, compute your ratio: assessment ÷ your estimate of market value, compared with the district’s certified average. In a district with an old revaluation and falling values, many assessments sit above the band — and those are the cases Chapter 123 was designed to catch without any appraisal.

What it does not tell you: the certified ratio moves every year (it is recalculated from the district’s sales), and the band is a presumption, not a conclusion — the board or court can still weigh the evidence. Treat the arithmetic as the first screen, not the whole case.

Where the ratios are published

The Division of Taxation publishes the certified average ratio for every taxing district annually — the same table the county boards and the Tax Court apply. Your own assessment is on your assessment notice and your tax bill; your market-value estimate is yours to support.

What this page does not cover

The statistical methodology behind the certified ratios, and the case law that shapes how the presumption is applied, are outside this page. The Division’s appeals page cited below states the band and the two standards.