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Division of Tax Appeals v. Township of Ewing

Decided: February 9, 1962.


Gaulkin, Kilkenny and Herbert. The opinion of the court was delivered by Herbert, J.s.c. (temporarily assigned).


[72 NJSuper Page 239] On October 1, 1959 Conrad and Lena Kundl owned 95 1/2 acres of land in Ewing Township. The assessed value placed upon that land for the tax year 1960 by the local assessor was $35,810, a figure which reflected the township's use of an assessing ratio of 25% of true value. When Mr. and Mrs. Kundl

appealed to the Mercer County Board of Taxation they got no reduction, but upon taking their case to the State Division of Tax Appeals they obtained a judgment reducing the assessment to $14,325.

The township has now brought to us for review the judgment of the State Division, and contends that the original assessment was proper and should not have been reduced. As the record contains numerous references to the value of each acre of the land, it may be noted that the original assessment was based upon $1,500 an acre and the reduced figure set by the State Division upon $600 an acre, both of these unit values having been translated into the respective assessments by using the township's established 25% ratio.

The land in question is a farm on which the Kundls live and which Mr. Kundl has worked for about 15 years. It is located on the Ewingville Road in an area where use of property for residential subdivisions is increasing rather rapidly. The case turns upon the standards of value to be applied. Should the farm be valued at what another farmer might pay for it if he intended to use it and keep it as a farm, or should its valuation for tax purposes reflect prospects of sale for residential plots? The proper answer to this question is not influenced by the provision which was added to our tax statutes in 1960 (N.J.S.A. 54:4-1, as amended by L. 1960, c. 51, p. 444) and which reads in part:

"In the assessment of acreage which is actively devoted to agricultural use, such value [the assessable taxable value prescribed by law] shall not be deemed to include prospective value for subdivisions or non-agricultural use."

We are considering here an assessment made as of October 1, 1959, and are not concerned with the effect of the subsequently-enacted statute or with a recent ruling that it is unconstitutional. See Switz v. Kingsley , 69 N.J. Super. 27 (Law Div. 1961).

However, the sentence we have quoted from the Laws of 1960 states the rule which Mr. and Mrs. Kundl seek to

have used in the valuation of their farm for tax purposes. Their expert witness, Mr. Bachman, valued the farm at $400 an acre. At the ration of 25% of true value, which was being used by the township in assessing as of October 1, 1959 for the year 1960, Mr. Bachman's appraisal would have produced a total assessment of $9,550 on the 95 1/2 acres of land. He relied, when testifying on direct examination, upon six sales of farm properties which brought prices ranging from $183 to $572 an acre. None of the properties sold was in Ewing Township, although all were in Mercer County. Mr. Bachman went on to testify that in the preceding four years there had been 151 sales "in this area," that he had examined each and every one of those sales and had ruled out the great majority of them as not being comparable because they "were not for agricultural purposes."

On cross-examination Mr. Bachman conceded that the "Kundl farm has a potential use for residential development in the future." He said that in 1957, as a broker, he sold 62 acres of farm land for residential development at a price of $800 an acre, which land was within a half-mile of the Kundl farm; and that three sales were made in 1958 of land in the same vicinity at prices ranging from $1,529 an acre to $3,065, these sales being also for other than farm use. He also testified that a portion of the Kundl farm had been bought from Mr. and Mrs. Kundl as the site of a church or parochial school at $3,000 an acre, and another portion had been bought by the school board of Ewing Township at $3,500 an acre. The church or parochial school sale took place shortly after the 1959 assessment date.

The expert witness for the township, Mr. McCampbell, valued the Kundl land at $143,250, or $1,500 an acre. It was his opinion that the highest and best use of the property would be for residential development, and he pointed to recent sales of lands in the immediate vicinity for such purposes at prices in excess of $1,500 an acre.

Mr. Kundl took the stand in support of his own case, but only to say that his property is ...

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