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I apologize in advance if this is a very naive question. We are first time home buyers starting to look at homes in the Summit/Livingston/Chatham/Madison/South Orange/Maplewood etc area.
My question is regarding property taxes. How accurate are the estimates of property taxes on Zillow? Do these towns/counties re-assess the tax amount when you buy the property and adjust the taxes to reflect the purchase price? Sometimes I see homes for sale on Zillow with a tax assessed value of something small like $300k when the home is listed for $700k. Are the taxes based on the $300k? Or will they be increased if we purchase the home for $700k?
Here's a random example in Summit: https://www.zillow.com/homedetails/1...40068203_zpid/
Zillow says the list price is $669k and the Tax Assessed Value is 249,500. The tax in 2020 was ~10k. It seems the home has only sold for ~240k back in 1994. Is it reasonable to expect our taxes if we bought this home would be approximately the same?
If these estimates are not accurate, what's the best way to get a sense of the property taxes? ~3% x listing price?
Also - is there a difference for new construction? I imagine the tax history was either referring to the empty lot of whatever was torn down prior to the build?
Any other advice or info about taxes related to these towns is welcome!
Thanks in advance for your help understanding how this works!
Properties are assessed periodically by the town and assigned a value. The town sets a property tax rate which usually combines a municipal tax, fire tax, and school tax. That percentage is then multiplied by the assessed value. You can contact the town to find out the current tax percentage. Also, ask them when they last assessed. If the just made assessments, your numbers should be good for a few years. If it has been a while, you could be in for a new assessment and possible sticker shock after buying.
Properties are assessed periodically by the town and assigned a value. The town sets a property tax rate which usually combines a municipal tax, fire tax, and school tax. That percentage is then multiplied by the assessed value. You can contact the town to find out the current tax percentage. Also, ask them when they last assessed. If the just made assessments, your numbers should be good for a few years. If it has been a while, you could be in for a new assessment and possible sticker shock after buying.
Agreed - this is especially true with flipped houses. Flippers might buy an old rundown cheap house with low taxes then either renovate or demolish and build new. Then when it’s listed for sale, the taxes are the old taxes and will skyrocket with the next assessment. In those cases, look at taxes for similar homes to get a sense of what you might be paying soon after buying.
House assessments change when you make improvements. This is triggered by permits. A kitchen redo, adding a bath, finishing a basement and installing an in
ground pool will mean a higher property tax bill.
If the seller made improvements before putting it on the market, the new taxes may not yet be in the system.
House assessments change when you make improvements. This is triggered by permits. A kitchen redo, adding a bath, finishing a basement and installing an in
ground pool will mean a higher property tax bill.
If the seller made improvements before putting it on the market, the new taxes may not yet be in the system.
I was just reading about this, because we were considering putting up a large shed and I wanted to see if it would raise our property taxes. The article I was reading said even putting in a beautiful garden could increase your property taxes! I had thought it was only things that required permits or were permanent improvements but apparently not?
I found another house which is assessed for about 70k higher than the home is currently listed for. I don't suppose buying it at the list price would reduce the tax bill right? Since the assessment is independent from what the home is selling for?
I understand now why everyone complains about the taxes in NJ. The mortgages are doable especially with the low interest rates but 1-2k taxes per month is tough.
The article I was reading said even putting in a beautiful garden could increase your property taxes! I had thought it was only things that required permits or were permanent improvements but apparently not?
There is a lot of misinformation out there, and I believe that this factoid falls into that category.
I have progressively added to my backyard gardens over the years, and nobody from the Assessor's office has ever looked back there.
In the 24 years that I have lived in my house, there have been two visits from the Assessor's office. The first one consisted of an extremely quick glance at the first and second floors, and the second one consisted of vaguely looking around from the entry foyer, without venturing more than 4 or 5 feet into my home. I even asked this woman if she needed to see the basement, and she replied that she did not. I have never heard of anyone from an Assessor's office going into--or even looking-at--someone's back yard.
Last edited by Retriever; 12-30-2020 at 02:46 PM..
Towns in NJ are not allowed to raise or lower property taxes based on a recent sale. As mentioned, they can raise property taxes based on improvements (which are sometimes hard to define). If you think the taxes are too high, you must file an appeal. When you look at the property taxes of your neighbors, you will find unexplained differences. Sometimes there is no way to figure out the differences. It is a very opaque process.
Here is the rough breakdown of property taxes:
60%- 70% local k-12 school system
20%- 30% local town operation - police, roads, sometimes garbage, town maint, code enforcement, rec programs, etc
10%- 15% county taxes - courts, jail, county police, county roads, parks
NJ has never lowered the property according to my town tax assessor.
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