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Sorry but you're mistaken. How do I know that? Because I actually happen to live in new construction. So my statement is not based on the theoretical or hypothetical. The tax assessment and the purchase price of my home (which is obviously FMV) are the same exact number.
Then either your town was current as of your purchase or you have a good case for a tax appeal.
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And when I stated West Orange had similar taxes, I wasn't referring to all of Essex county. I was referring to the Essex towns specifically mentioned in the the post I was responding to - which were Glen Ridge and Montclair. The 2015 tax rates of those three towns were: Glen Ridge 3.426, West Orange 3.817, and Montclair 3.526
That's general tax rate, not taking into account equalization. West Orange is $3.69, Glen Ridge is $3.13, and Montclair is $3.00 on effective tax rates in 2015.
But that can't be right. If the last reval in your town was long enough ago that all the properties in town are significantly below FMV, then the general tax rate is padded to reflect that. So buyers of brand new construction should NOT be paying that padded general tax rate that everyone else is.
For example, before West Orange had its reval in 2011, the general tax rate was something nutso like 13%. THIRTEEN. That's because $500,000 houses had a 1980's assessed value of $115,000.
So,if I had purchased a brand new construction house, in 2010, in West Orange, for $500,000...that means I would be taxed at 13%? That means my taxes would be $65,000...on a $500,000 house! Again, I think that that skewed/padded general rate (whether 13% when it should be 3%; or 3.5% when it should be 2.5%) would have to have the equalization ratio applied to it, for buyers of new construction. Not trying to be argumentative. I would really like to know what the deal is. There's gotta be some kind of established, official protocol in place for this kind of thing.
If not, they need to do revals every 2 years or something.
I'm not sure what the deal is. What I can tell you is that my town (Rutherford) does not use an equalization ratio. Our taxes are calculated by simply applying the town's general tax rate to one's assessment. The assessments here aren't current to the minute - but it's not like they're 10 years out of date either. But even in a town where assessments are 90% of FMV, new construction gets screwed.
Any new house here or a house that had permits pulled recently for a reno have current assessments that reflect market value . But I also see some old Victorians on the market for $900k that are assessed at like $600k. So it's inconsistent. What I'd like to see at the very least is anytime a house is sold, the purchase price automatically becomes the new assessment. That would go a long way towards evening up the score.
Then either your town was current as of your purchase or you have a good case for a tax appeal.
I actually don't have a good case for a tax appeal for two reasons. One, there are few comps for a new construction home in a town full of pre-war homes. Two, the only thing you can appeal is your assessment - i.e., it being more than 15% over FMV. And how can you do that when it's based on what you paid for the house? It's the very definition of fair market value.
Here's what I can tell you - my town is unusual. The effective tax rate is more than the general tax rate. You'll see that in a few towns in NJ. Not sure how that happens.
I'm not sure what the deal is. What I can tell you is that my town (Rutherford) does not use an equalization ratio. Our taxes are calculated by simply applying the town's general tax rate to one's assessment.
All towns do that. The equalization ratio is the ratio of assessed value to fair market value.
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The assessments here aren't current to the minute - but it's not like they're 10 years out of date either. But even in a town where assessments are 90% of FMV, new construction gets screwed.
Rutherford's assessments are in fact 10 years out of date; the last revaluation was done in 2006. Current equalization ratio is 94.35%, but with the revaluation that out of date, you can expect a lot of properties to be over or under valued. They're supposed to do a revaluation in 2018.
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What I'd like to see at the very least is anytime a house is sold, the purchase price automatically becomes the new assessment. That would go a long way towards evening up the score.
That's called a spot assessment and is illegal statewide in NJ.
All towns do that. The equalization ratio is the ratio of assessed value to fair market value.
Rutherford's assessments are in fact 10 years out of date; the last revaluation was done in 2006. Current equalization ratio is 94.35%, but with the revaluation that out of date, you can expect a lot of properties to be over or under valued. They're supposed to do a revaluation in 2018.
That's called a spot assessment and is illegal statewide in NJ.
Well then this is why I'm screwed. Unlike most others in town my assessment is not out of date. It's current and based on the sales price. And they didn't scale it down based on the equalization ratio you stated. And unless it's more than 15% off, you can't appeal. So this is why new construction is highly taxed even when it has the same fair market value as an older home. Most assume that a newer home is always worth more than an older one, but that's not always the case. Some of those old Victorians are huge - like 3000-4000 square feet. And a lot of them have illegal improvements that never had permits pulled. So they'll sell for $800-900k, yet still have $500k assessments. This is why I can't wait for a reval. All those houses will start paying their fair share, which means a tax cut for me once the tax rate is lowered to compensate for all the extra revenue brought on by the reval.
I'm not sure what the deal is. What I can tell you is that my town (Rutherford) does not use an equalization ratio. Our taxes are calculated by simply applying the town's general tax rate to one's assessment. The assessments here aren't current to the minute - but it's not like they're 10 years out of date either. But even in a town where assessments are 90% of FMV, new construction gets screwed.
Any new house here or a house that had permits pulled recently for a reno have current assessments that reflect market value . But I also see some old Victorians on the market for $900k that are assessed at like $600k. So it's inconsistent. What I'd like to see at the very least is anytime a house is sold, the purchase price automatically becomes the new assessment. That would go a long way towards evening up the score.
That is unconstitutional in NJ and a court case involving a Summit homeowner is the case law.
Your assessor cannot set your value based on your purchase price
Not one mention of Abbott, of course, because it wouldn't be politic to mention that all that state income tax money which is supposed to go for schools is disproportionately going to the Abbott districts.
Can you cite the statute or court case that says that - because my purchase price and assessment are the same. So perhaps I have a case.
I will speak to the property tax staff at work. I will not see them until Thursday though
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