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Chapter 123: the fairness test for assessments under appeal

It uses the "common level range" a band around the district's average ratio.

The common level range is ±15% of the district's average ratio.

What is Chapter 123?

Chapter 123 (N.J.S.A. 54:51A-6) establishes the rules for determining whether a property assessment is "within range" of the district average.

It creates a ±15% corridor around the Director's ratio. Properties assessed within this corridor cannot successfully appeal based solely on their ratio — they're considered to be at "common level."

This matters because commercial properties are often assessed at 100% of market value (after a reassessment or revaluation), while residential properties may lag behind due to infrequent reassessments. When the average ratio drops, commercial properties at 100% can end up outside the corridor.

The ±15% Corridor

Common Level Range Formula
Average Ratio × 0.85 to Average Ratio × 1.15
If Average Ratio = 100%
85% — 115%
If Average Ratio = 90%
76.5% — 103.5%
If Average Ratio = 80%
68% — 92%

Key insight: At 80% average ratio, a property assessed at 100% is 8 points above the corridor ceiling (92%). That property can appeal under Chapter 123 for a reduction.

Explore Topics

Critical Threshold

The 87% Cliff

When the average ratio drops below 87%, commercial properties assessed at 100% become appeal-exposed.

Learn more
Interactive Demo

Corridor Demo

See how two houses with different ratios can both be considered "fair" when they fall within the corridor.

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Why This Matters

When municipalities delay reassessments, the average ratio drifts below 100%. As it falls, the corridor narrows. Eventually, commercial properties assessed at market value end up outside the corridor — giving them legal grounds to appeal.

Successful appeals shift tax burden from commercial to residential properties, and the municipality (not the school district or county) must pay refunds plus interest.