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If you see a town where the assessed value is a lot lower than the sales price, it might mean that a reassessment is coming soon and that could have a dramatic effect on your taxes.
If you see a town where the assessed value is a lot lower than the sales price, it might mean that a reassessment is coming soon and that could have a dramatic effect on your taxes.
Good point. Is there usually a set interval on how often they do the reassessments? It also appears that besides the reassessments, towns play with the property tax rate on annual basis. For example, I saw many home listing online for which the assessed value didn't change but the tax amount changed during the same period. That's of course if one can trust Zillow with the tax data provided.
If you see a town where the assessed value is a lot lower than the sales price, it might mean that a reassessment is coming soon and that could have a dramatic effect on your taxes.
This is not entirely accurate. Town Re-Assessments cost time and money. Rather than do that to keep up with the ever fluctuating real estate market, the town simply applies a multiplier(tax rate) that keeps up with general market value. This creates the disparity between actual property tax rate and effective tax rate. Effective tax rate is how you judge taxes in a town not actual tax rate since, as you can see, the rates vary widely from town to town based on when they last did a town wide assessment. If they do reassess they simply lower the multiplier and raise the assessed value.The only red flag would be if the assessed value of the property you are looking is much lower than comparable properties(square footage/lot size) in the some town/neighborhood. Then you should check to see if non permitted renovations/additions were done since that can have a dramatic impact on taxes if the town reassesses.
Last edited by Goldendoodle1969; 06-14-2016 at 08:47 AM..
Thanks everyone for your replies! I think we will spend the next few months taking day trips to the various towns that were suggested and try to get a feel for them.
This is not entirely accurate. Town Re-Assessments cost time and money. Rather than do that to keep up with the ever fluctuating real estate market, the town simply applies a multiplier(tax rate) that keeps up with general market value. This creates the disparity between actual property tax rate and effective tax rate. Effective tax rate is how you judge taxes in a town not actual tax rate since, as you can see, the rates vary widely from town to town based on when they last did a town wide assessment. If they do reassess they simply lower the multiplier and raise the assessed value.The only red flag would be if the assessed value of the property you are looking is much lower than comparable properties(square footage/lot size) in the some town/neighborhood. Then you should check to see if non permitted renovations/additions were done since that can have a dramatic impact on taxes if the town reassesses.
This is 100% accurate. You can be in a house for decades and not see a re-assessment. Each year the municipal government sets a budget. After figuring out revenue from other sources (state or federal aid or grant money; bonds raised, etc.), they are left with a fixed dollar amount that needs to be raised from property owners. If every property in town was the exact same size with the exact same improvements, than they would just take this fixed dollar amount and divide it by the number of properties to get each properties tax responsibility for the year. But because this is never the case, they use an assessment system which enables properties to pay proportional to their relative value. It doesn't matter what that assessment is, so long as its proportional amongst properties within the municipality.
Therefore, its not smart to waste time looking at tax rates and assessments between and amongst towns. If you are looking at 4 bedroom colonials in Montvale, Ridgewood, Mahwah and Ramsey, just look at the actual taxes paid. If the house in Montvale paid $10,000, and the house in Mahwah paid $15,000, and the houses are basically the same, than you know that taxes in Mahwah are generally 1.5 times higher than Montvale. To ensure that one or both of these houses are not anomalies (like non permitted additions, as the earlier poster suggested), than do multiple comparisons of like houses to like houses to see if the ratios are the same.
But the bottom line is that you will only be paying taxes on one house - the one you buy. So worry about that one only. When shopping, just line up your prospective houses, list the actual taxes paid on each, and make a decision. Its best to ignore assessments and rates.
To follow up, we took a half-day trip to NJ today and visited/drove around some of the towns. In the order of my most preferred to the least:
1) Westfield - this was a stand-out among the 6 towns that we visited. The town center was nice, lots of things going on. Very clean.
2) Cranford - stopped in the village were the train stop is. Went to the Starbucks right across. Seemed like a nice, clean and bright town. The town center didn't seem to be all that big, but I got a good vibe. One thing that I noticed, there were many homes for sale in Cranford. I wonder why.
3) Summit - For a while I thought this is yet another of those blend, uninspiring and faceless towns, but that changed when we hit the area where they have restaurants, a Starbucks, etc. Seemed like a nice town. Granted, we only drove through the town, and didn't stop, we did not see a single For Sale sign. What's going on? People just don't sell in Summit?
4) Berkley Heights - I don't mean to hurt anyone's feelings, but this town was just plain boring. There was nothing, absolutely nothing. I can't see myself living there. However, it did seem to be a clean and safe town.
5) New Providence - see Berkley Heights
6) Plainfield - this town looked very run down and shoddy.
Today's trip was very informative. Now I have a point of reference, which will put many of the comments/suggestions in perspective. One important variable that was there before, but became very important, is how well will we adjust to life in the suburbs of New Jersey after NYC, where to get my groceries, I walk 5-10 minutes down the block. To go to work, I get on the subway which is a 5 min walk from my house. When we run out of milk, I can walk down to the corner store at midnight and get the milk. Will I miss the non-stop pointless car honking, or will I be able to switch off my a$$hole driving mode to something more civilized. And the list goes on and on....
Anyways, for the next trip will be going up North - Ramsey, Allendale, Waldwick, Ho Ho Kus, Ridgewood and Glen Rock. We'll see what those towns have to offer.
To follow up, we took a half-day trip to NJ today and visited/drove around some of the towns. In the order of my most preferred to the least:
1) Westfield - this was a stand-out among the 6 towns that we visited. The town center was nice, lots of things going on. Very clean.
2) Cranford - stopped in the village were the train stop is. Went to the Starbucks right across. Seemed like a nice, clean and bright town. The town center didn't seem to be all that big, but I got a good vibe. One thing that I noticed, there were many homes for sale in Cranford. I wonder why.
3) Summit - For a while I thought this is yet another of those blend, uninspiring and faceless towns, but that changed when we hit the area where they have restaurants, a Starbucks, etc. Seemed like a nice town. Granted, we only drove through the town, and didn't stop, we did not see a single For Sale sign. What's going on? People just don't sell in Summit?
4) Berkley Heights - I don't mean to hurt anyone's feelings, but this town was just plain boring. There was nothing, absolutely nothing. I can't see myself living there. However, it did seem to be a clean and safe town.
5) New Providence - see Berkley Heights
6) Plainfield - this town looked very run down and shoddy.
Today's trip was very informative. Now I have a point of reference, which will put many of the comments/suggestions in perspective. One important variable that was there before, but became very important, is how well will we adjust to life in the suburbs of New Jersey after NYC, where to get my groceries, I walk 5-10 minutes down the block. To go to work, I get on the subway which is a 5 min walk from my house. When we run out of milk, I can walk down to the corner store at midnight and get the milk. Will I miss the non-stop pointless car honking, or will I be able to switch off my a$$hole driving mode to something more civilized. And the list goes on and on....
Anyways, for the next trip will be going up North - Ramsey, Allendale, Waldwick, Ho Ho Kus, Ridgewood and Glen Rock. We'll see what those towns have to offer.
Life in the suburbs is very different from NYC.
When we moved to Central Jersey I had to get used to living by the train / bus schedules. It's not like the City where a bus will be by in a reasonable amount of time. It could be an hour or longer between.
We do our grocery shopping once per week. Things need to be planned or you waste a lot of gas & time.
Wait until they predict a big snowstorm & see how the supermarkets get cleaned out of everything. LOL I always joke that you'd think the apocalypse is coming. But, if you can't dig your car out for several days you do need to stock up on necessities.
There's also a lot of nice things about NJ. Lots of inexpensive regional theater, great libraries & nice people.
I think if you move to NJ you'll be fine. It will take some adjusting though.
3) Summit - For a while I thought this is yet another of those blend, uninspiring and faceless towns, but that changed when we hit the area where they have restaurants, a Starbucks, etc. Seemed like a nice town. Granted, we only drove through the town, and didn't stop, we did not see a single For Sale sign. What's going on? People just don't sell in Summit?
Summit's large, and there are houses for sale. You just didn't happen to drive by any.
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4) Berkley Heights - I don't mean to hurt anyone's feelings, but this town was just plain boring. There was nothing, absolutely nothing. I can't see myself living there. However, it did seem to be a clean and safe town.
5) New Providence - see Berkley Heights
The towns of the Gladstone Branch pride themselves on boring :-)
Quote:
Today's trip was very informative. Now I have a point of reference, which will put many of the comments/suggestions in perspective. One important variable that was there before, but became very important, is how well will we adjust to life in the suburbs of New Jersey after NYC, where to get my groceries, I walk 5-10 minutes down the block. To go to work, I get on the subway which is a 5 min walk from my house. When we run out of milk, I can walk down to the corner store at midnight and get the milk. Will I miss the non-stop pointless car honking, or will I be able to switch off my a$$hole driving mode to something more civilized. And the list goes on and on....
You can get a lot of that (not necessarily the midnight store) if you live in near center of a train town; you'll pay a lot for the convenience.
And don't worry, we still drive like a-holes in NJ, with a little less honking. Yesterday I had some a-hole driver start cursing me out because I was on a bike, and today someone was sitting at an intersection, waited for me to just about be on top of him, then pulled out right in front of me (he had a stop sign, I was on a major road). Fortunately for both of us my brakes are good.
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