My Mansion's Worth How Much? Wealthy Fight Assessors

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By any measure, Vernon Hill has a very nice home.

His 29,236-square-foot Italianate mansion in Moorestown, N.J. has marble floors and walls, a billiard room and an ornate foyer with a black-onyx fountain. Its centerpiece is a $2.9 million "Lemon Room" – a two-story space filled with lemon trees and windows that look out over the landscaped gardens.

But Hill, the founder of Commerce Bank, claims the home is worth far less than the town's tax assessor claimed. While the assessment for the home was $21 million, Hill's attorneys said the value is around $10.1 million and therefore should be subject to lower taxes.

(Read more: The 5 Highest Tax States for High Earners)

A tax judge has disagreed. New Jersey Tax Court judge Patrick DeAlmeida ruled last week that Hill's house is actually worth $34 million – far more than either Hill or the town claimed.

"The home is extravagant, its amenities extraordinary, and the improvements on the property are uniquely opulent," the judge wrote in the opinion.

The good news for Hill is that he won't have to pay taxes based on the assessment of $34 million. Because the township didn't file a counterclaim, the $21 million assessment was upheld.

Yet the Hill case shows how wealthy homeowners – especially in areas with high property taxes – are still challenging and fighting what they perceive as overly high tax assessments on properties after the housing crisis. In the court case, Hill and his attorney, Steven Irwin, claimed that the higher assessment was based on misleading comparisons and faulty assumptions. They also said the house would be difficult to sell at such a high price.

According to the ruling, Hill and his attorney maintained that the house was "overbuilt, was constructed to suit plaintiffs' tastes, is unlikely to attract a high-end buyer who could otherwise construct a home to suit his or her own tastes, and has amenities that are expensive to maintain.

"In addition, the expert noted that Moorestown, while affluent and desirable, does not have a concentration of wealthy residents in mansion-like homes, a factor that would discourage wealthy purchasers."

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While Irwin declined comment on the Hill case, he said that, in general, townships in New Jersey are frequently miscalculating assessments for tax purposes. One of the central problems, he said, is that the state calculates a home's worth based on its replacement value, rather than the lower resale value.

Because of this and other errors, said the lawyer, "I'm going to have a thriving business."