South Orange property taxes (Newark, Maplewood: mortgage, how much, new house)

[setancre]

I've been looking at NJ properties recently (currently living in NYC) and I don't fully understand how property taxes are being assessed in certain towns.

The best example I can find is this house listed here for 499k in South Orange:

http://tinyurl.com/57otyb

It's on a large lot, nice location, but the house needs a ton of updating and the taxes right now are almost $23k.

I found the public tax record here:

http://www.starledger.com/str/indexp...5&frmlot=00019

But I don't get what basis they are using to charge the taxes? They say the taxable value is $971,952 and there is an assessment of 350k are they using one of those numbers to charge the taxes? If someone bought the house for $499,000 how do they decide what value to use?

Thanks for your help!

[Lusitan]

Purchase price doesn't really have anything to do with the property taxes you'll pay. The town periodically (maybe every 10 years or so) does a valuation of all properties in town and then sets tax rates accordingly. It's really more about the value of the property relative to other properties in town (i.e., the town is going to collect the taxes it needs, it just uses valuation relationship among properties as a way to distribute the tax burden in a relatively proportional way). So it won't matter what you buy the house for. (Supposedly, there's a way you can petition the town for a revaluation, but I've heard few success stories in that regard.)

23K per year is not unusual for a large house/lot in South Orange / Maplewood. (I know - it's crazy how much NJ residents pay in taxes!) However, you might want to check some other sources to make sure that number is correct before you make any decisions.

Good luck!

[clevedark]

Property taxes are insanely high in Maplewood and South Orange. So high that people tend to take it into consideration when pricing the house, and price the house lower because of it. I think in Maplewood a 750K valued house is approx. 20 in taxes (I could be wrong, but I'm close). And we're talkin' a quarter acre lot here....

Maplewood and South Orange share a school system. And when costs rise in the school, and more taxes are need to pay for things, the school board gets the money they need without a town vote. Maplewood is bigger than South Orange, and could always vote something down, so voting was done away with to be fair.

There is also a large chunk of tax money going to Essex County government.

Way back when we were reassessed I remember getting two numbers--one for the house and one for the land. Many times the land was worth more than the house. You'd add it together and voila your value.

You can ask the seller to try to get the taxes down if they're really out of whack. Or maybe they already tried and that's why they're selling the property for a song. You'll have to talk to the broker.

[setancre]

Ok thanks, that just seems crazy to me! How could your mortgage be $2300 and the taxes be $1900/month?

I knew property taxes were high in Essex county but I didn't think they could possibly be that high.

[clevedark]

When we bought our house (315K) the taxes were 9K. A reval came up a couple of years later. They valued our house at 500K at the taxes were all of a sudden 15K. Seven years later the taxes must be around 20K.

But people accept it because S Orange and Maplewood are fantastic, unique towns. They're suburbs for the reluctant surbanite, who really doesn't want to leave the city but can't afford to stay. It's walkable, everyone is on the same wavelength. It's very pleasant place to live if you work and have a steady income stream. Retired people tend to leave, but there's a never ending stream of young families from NYC who come to take their places.

And the house that costs 750K in Maplewood would cost 1.5 million in Millburn or Short Hills. And to the average Maplewood/S. Orange person, that is a vastly inferior community that you would never want to live in.

[Lusitan]

Originally Posted by setancre

Ok thanks, that just seems crazy to me! How could your mortgage be $2300 and the taxes be $1900/month?

It is crazy. Newark and the other poor parts of Essex are a drag on the rest of the county's taxes. There is also a huge amount of inefficiency and waste thanks to all of the lilliputian towns in NJ.

[setancre]

I actually just found a website that does the assessment revaluations, http://asinj.com and found out that South Orange did a revaluation for 2007 and the taxes on this property for 2008 will actually rise another $2700 to $25,544 assuming the same tax budget (will prob rise even more due to standard yearly increase).

That is completely insane, I feel bad the homeowner, how do you sell a fixer-upper that has a tax burden of $2100+ a month not even dealing with the mortgage yet? I guess you wait for a developer that would knock the house down and build something higher-end on that land that would appeal to someone with more $$?

Well anyway I had an interesting crash course in NJ property taxes this morning!

[clevedark]

Believe it or not, there's not a lot of tear down action going on in South Orange and Maplewood. The buyer for the new house could afford something nice in Short Hills or Summit. The buyer in Maplewood South Orange is someone who wants as big a house as they can get, an older home with some character, who has a healthy income stream, as opposed to the Short Hills/Summit buyer who usually has a lot more dough on hand.

That's part of the reason the towns are so appealing--there hasn't really been a great deal of new construction over the years, everything fits together nicely.

I should add that we moved away from my beloved Maplewood South Orange partly because of the ridiculous taxes, and so did many of our friends. More than a few of us moved out of state.

[hrjersey]

The taxes are INSANE. On top of it, there are services like garbage collection which aren't even included in the taxes (at least they weren't 4 years ago when I sold my mom's house in SO). This house is located in a "desirable" section of town although it isn't the area known as Newstead which used to be the most desirable. From the picture, and from what I know of the location, it is not a level lot.

The other irony is that for your $23K you don't even get a great school system.

South Orange and Maplewood are really nice towns. The homes simply have a charm that newer homes don't have. But there is just no excuse for those type of taxes.

[clevedark]

Look at the house in South Orange for 499K and then go look at the 499K house in Millburn or Chatham (if one even exists) and you'll see why many people grit their teeth and pay the taxes.