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Old 10-08-2015, 11:23 AM
 
Location: NJ/NY
18,423 posts, read 15,169,213 times
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When a new house is built, it is assessed at market value, and unless they just happen to build the same year as the reassessment, they have to pay the multiplier on top of that. So they are paying more than they should be paying.

Likewise, an old home is assessed at an old assessment value (sometimes VERY old) with a multiplier that doesn't keep up with the actual market. So they are paying less than they should be paying.

When the town reassesses, everyone with taxes that go down are happy, and everyone with taxes that go up are mad.

But in reality, the people with taxes that go up, should be thankful about all the money they saved over the years paying less than their fair share of the town's expenses.

And the people with taxes that go down, should realize over the years how much money they have paid the town over and above their fare share of the town's expenses.

Though, if you try to tell that to someone who just had a huge tax increase, you might get punched in the face.
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Old 10-09-2015, 09:45 PM
 
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Originally Posted by AnesthesiaMD View Post
When a new house is built, it is assessed at market value, and unless they just happen to build the same year as the reassessment, they have to pay the multiplier on top of that. So they are paying more than they should be paying.
Nyet. Thats what the equalization ratio is used for. A new house's assessment is market value times equalization ratio.
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Old 10-09-2015, 10:59 PM
 
Location: NJ/NY
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Originally Posted by nybbler View Post
Nyet. Thats what the equalization ratio is used for. A new house's assessment is market value times equalization ratio.
But they don't have an equalization ratio for each individual house, just for the entire town. And new homes are built constantly between assessments. I'm speaking from experience. I built a house, and only 2 years later the town did a town wide reassessment and my property taxes went down $4,350, even though my new assessed value was very close to my original assessment (a little higher actually). The only difference was the multiplier. They do equalization ratios yearly, but apparently, it doesn't work the way its supposed to. Everyone with newer homes got decreases, and everyone with older ones got increases. It was all everyone was talking about at the time. I remember reading in the local paper about some older homes having a greater than 30% property tax hike.

How accurate is your equalization ratio going to be when they wait 30 years to do a reassessment? Our assessed value to true value ratio was only 12 before the reassessment!

Last edited by AnesthesiaMD; 10-09-2015 at 11:23 PM..
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Old 10-10-2015, 06:20 AM
 
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The town has the equalization rate. The answer is when you wait 30 years it is not accurate. That is why the statute says once towns are at 85% of true value they need to have a reassessment done.

Politics stop that from being enforced.

What you believe the process is may still be happening however it was litigated in a case involving Summit and the court ruled that new assessments could not be what the home was recently purchased for.
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Old 10-10-2015, 07:55 AM
 
Location: NJ/NY
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Originally Posted by tom1944 View Post
The town has the equalization rate. The answer is when you wait 30 years it is not accurate. That is why the statute says once towns are at 85% of true value they need to have a reassessment done.

Politics stop that from being enforced.

What you believe the process is may still be happening however it was litigated in a case involving Summit and the court ruled that new assessments could not be what the home was recently purchased for.
Right. When you buy an older or existing home, they are not supposed to reassess. I don't know how well that is enforced either. Of course, a lot of people do renovations before they move into an old house and I don't know whether they only assess the renovations and add it to the old assessment, or if they do a reassessment of the entire home. I would imagine the latter.

As I said, my town was at only 12%. On the state's tax website there were many towns that were well under 85% back then, so I don't think they enforce this at all.
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Old 10-10-2015, 08:11 AM
 
Location: NJ/NY
18,423 posts, read 15,169,213 times
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Quote:
Originally Posted by tom1944 View Post
The town has the equalization rate. The answer is when you wait 30 years it is not accurate. That is why the statute says once towns are at 85% of true value they need to have a reassessment done.

Politics stop that from being enforced.

What you believe the process is may still be happening however it was litigated in a case involving Summit and the court ruled that new assessments could not be what the home was recently purchased for.
I found the website. In 2006-2007 almost all of the towns in Essex County were below that level. In many cases, well below. Then in 2008, about half the towns were below 85%. Now, in 2015, all the towns are above 85%. I don't know what year that statute was put in place, but it seems they started enforcing it around 2008. Probably the reason most of these towns (including mine) did reassessments around that time. The old method clearly was benefiting the older residents, which (other than cost) might be why the towns were so reluctant to do more frequent reassessments.

NJ Division of Taxation - Table of Equalized Values
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Old 10-10-2015, 09:48 AM
 
10,220 posts, read 19,144,208 times
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Quote:
Originally Posted by AnesthesiaMD View Post
But they don't have an equalization ratio for each individual house, just for the entire town. And new homes are built constantly between assessments. I'm speaking from experience. I built a house, and only 2 years later the town did a town wide reassessment and my property taxes went down $4,350, even though my new assessed value was very close to my original assessment (a little higher actually). The only difference was the multiplier. They do equalization ratios yearly, but apparently, it doesn't work the way its supposed to. Everyone with newer homes got decreases, and everyone with older ones got increases. It was all everyone was talking about at the time. I remember reading in the local paper about some older homes having a greater than 30% property tax hike.
If equalization ratios worked perfectly there wouldn't need to be revaluations. The equalization ratio in your town was too high, but there could be towns where it was too low, and other towns where it was right (though non-uniformity means you still need a revaluation). FWIW when they re-valued West Orange, my property taxes (on my 50-year-old house) pretty much stayed the same.
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Old 10-10-2015, 10:18 AM
 
Location: NJ/NY
18,423 posts, read 15,169,213 times
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Originally Posted by nybbler View Post
If equalization ratios worked perfectly there wouldn't need to be revaluations. The equalization ratio in your town was too high, but there could be towns where it was too low, and other towns where it was right (though non-uniformity means you still need a revaluation). FWIW when they re-valued West Orange, my property taxes (on my 50-year-old house) pretty much stayed the same.
The age of the house is more relevant in towns that do infrequent reassessments. Maybe WO has kept up to date? Maybe your house was reassessed for some other reason in the interim? Maybe a former owner filed a tax appeal? Or, maybe, as you seem to be saying, your town is better at calculation than others. If that is the case, consider yourself lucky. Remember when Montclair did their reval? People were literally forced to sell their homes because the fluctuations were so drastic.

Also, it seems the housing inflation rate in WO is more tame than in some other towns. This is just conjecture from having lived in the area my entire life. Maybe the high tax rate is responsible. Maybe the changing demographics? Maybe something else? Likely all of the above.

I dug up this article on Montclair...http://www.northjersey.com/news/thou...52866?page=all

Last edited by AnesthesiaMD; 10-10-2015 at 10:34 AM..
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Old 10-10-2015, 01:04 PM
 
10,220 posts, read 19,144,208 times
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Quote:
Originally Posted by AnesthesiaMD View Post
The age of the house is more relevant in towns that do infrequent reassessments. Maybe WO has kept up to date? Maybe your house was reassessed for some other reason in the interim? Maybe a former owner filed a tax appeal? Or, maybe, as you seem to be saying, your town is better at calculation than others.
W.O was way out of date with an equalization ratio of 22.8% I think they were just better at calculation, though this might have been accident rather than skill.

Quote:
If that is the case, consider yourself lucky. Remember when Montclair did their reval? People were literally forced to sell their homes because the fluctuations were so drastic.
Your article suggested Montclair's issue was they did a reval at the top of the market, and many people did appeals and won big while others just took the hit. Then when they did the next reval, anyone with a property that had been appealed lost big, whereas those who owned properties whose owners took the hit won big. Didn't really have to do with equalization, more a screwed-up 2006 reval (or appeals which shouldn't have been granted, I don't know).

Quote:
Also, it seems the housing inflation rate in WO is more tame than in some other towns. This is just conjecture from having lived in the area my entire life. Maybe the high tax rate is responsible. Maybe the changing demographics? Maybe something else? Likely all of the above.
Yeah, high taxes, no train, mediocre schools. This year I started to see a bunch of infill in the Gregory section, though, so I think we're starting to see spillover from people priced out of train towns, or people who just want a new house (since there's more foreclosed teardowns in WO than neighboring towns). And the new stuff on the Livingston border is probably having some positive effects on the schools and some slight pushback on the demographics.
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Old 10-11-2015, 01:41 PM
 
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A bit confused: looking at the 2014 numbers Basking Ridge had around a 1.9 and Montgomery a 3.2. Does that mean Montgomery has over a 1% tax hike over BR? I would have easily thought BR would have been more than Montgomery.
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