While commercial real estate lease transactions and sales normally allocate responsibility for property taxes, there are several key issues for the taxpayers to evaluate before signing a lease or closing title. These five tips can help avoid excessive taxation or minimize the chances of a property tax surprise before it’s too late. Check the “Equalization Ratio”: New Jersey municipalities use an equalization ratio to translate property tax assessment to market value, thereby avoiding the need to reassess properties every year. Commonly known as the “Chapter 123” ratio, the ratio is changed every year and all town’s ratios are available on the New Jersey Division of Taxation’s website here: https://www.state.nj.us/treasury/taxation/lpt/chapter123.shtml. For a ratio at or near 100%, the assessment is intended to represent current market value. But some municipal agencies have base assessments that have not been revalued in many years, so the equalization ratio is low, such as the City of Elizabeth, which has a 2020 ratio of 10.68%. As a result, a property assessed at $500,000 in Elizabeth in 2020 is intended to indicate a market value of about $4,700,000. This means that even small changes in the assessment will indicate significant impacts on value.