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Old 07-18-2018, 07:57 AM
 
22 posts, read 16,853 times
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We are looking at a house in Green Brook, NJ. Recently that house dropped the listing price which is very attractive. What's holding me back are the property taxes. My question is can i fight the City on taxes if I buy this house. Currently taxes are at $18,700 at $700,000 assessment. So lets say If I get the house at $690k will this give me leverage to get the taxes lowered?
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Old 07-18-2018, 08:01 AM
 
Location: Bergen County, NJ
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That’s a 1.5% difference between purchase price and assessment. If your taxes went down 1.5%, you would save about $280 a year. Is that going to impact your buying decision?
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Old 07-18-2018, 08:06 AM
 
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@hudsoncoNj thanks for your response.

It sure will. Taxes at $18700 is way too high for my budget. I am not able to make a decision since taxes are so high. $280 is not that much lower.
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Old 07-18-2018, 08:35 AM
 
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I don’t believe it would go down. Assessment values are typically not the same as purchase price.
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Old 07-18-2018, 09:29 AM
 
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Quote:
Originally Posted by jaindesi View Post
@hudsoncoNj thanks for your response.

It sure will. Taxes at $18700 is way too high for my budget. I am not able to make a decision since taxes are so high. $280 is not that much lower.
If taxes at almost $19,000 a year is too much for your budget then you need to look elsewhere for a house.
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Old 07-18-2018, 09:32 AM
 
Location: NJ
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when i called about reducing my taxes, there is a certain amount that your home value needs to be below the assessed value for them to address it. i forget what it was but it certainly was more than 1.5%, so i wouldnt expect a reduction if i were you.
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Old 07-18-2018, 09:35 AM
 
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As mentioned above, assessed value has nothing to do with purchase price. Our assessed value is lower than our purchase price, does that mean we should be paying more? Of course not, because the assessment averages values across the town based on square footage of the yard and the home.

But even if you do win that extra $300 a month I'll bet you'll be paying that much within a few years. If buying this house means you are on a $300 a month thread you should not buy this house. Your dishwasher goes and you're out $600 one afternoon, did you budget for that? Your heating system dies in the middle of winter, is there room in the budget for an emergency $400 visit?

You need to be building in greater flexibility, not planning on overspending on a house and hoping you can get taxes to go down in order to afford the home emergencies that will arise.
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Old 07-18-2018, 10:40 AM
 
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The value of your house realistically doesn't make a difference. The only thing that would normally matter is the taxes on comparable properties ('comps' in the lingo). The reason property taxes prevail is that they are a steady source of income for the municipalities involved, so they're designed to never really change, well apart from gradually creeping up. Towns will do reassessments periodically, but they're going to be revenue neutral so some people's taxes will go up and some will go down during those events.

Your taxes WILL go up. Plan for that. If you're on (or just over) the edge now then you'll definitely be over the edge next year. Never plan for your taxes to go down, the world is more likely to fall apart than for that to happen.
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Old 07-18-2018, 11:05 AM
 
Location: Bergen County, NJ
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Quote:
Originally Posted by jaymoney View Post
As mentioned above, assessed value has nothing to do with purchase price. Our assessed value is lower than our purchase price, does that mean we should be paying more? Of course not, because the assessment averages values across the town based on square footage of the yard and the home.

But even if you do win that extra $300 a month I'll bet you'll be paying that much within a few years. If buying this house means you are on a $300 a month thread you should not buy this house. Your dishwasher goes and you're out $600 one afternoon, did you budget for that? Your heating system dies in the middle of winter, is there room in the budget for an emergency $400 visit?

You need to be building in greater flexibility, not planning on overspending on a house and hoping you can get taxes to go down in order to afford the home emergencies that will arise.

$300 a month would be understandable, but we’re talking about $300 a year.
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Old 07-18-2018, 11:06 AM
 
Location: N NJ --> NE FL 2015
1,386 posts, read 1,671,219 times
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I appealed our property taxes in Wyckoff 5 years ago and won. This is how you determine whether or not to appeal:

First thing's first, you have to calculate what Green Brook perceives your property to be worth. For that, you need to look at Green Brook's common level ranges (via NJ State Treasury site):

https://www.state.nj.us/treasury/tax...8/somerset.pdf

Green Brook 2018
Average Ratio: 97.02
Lower Limit: 82.47
Upper Limit: 111.57

You indicated that the current assessment is $700,000. This is how you use the ratios above:

Market Value = current town assessment of $700,000 divided by .9702 (average ratio) = $721,500 - This is what your town thinks the house is worth.

Next, you have to use the upper and lower limit to see if the sold comparables in your neighborhood fall outside it.

Lower Limit: $700,000 divided by .8247= $848,793
Upper Limit: $700,000 divided by 1.1157 = $627,408

IF comparable homes in your neighborhood are selling for less than $627,408 (your purchase price must be below $627,408) and you can prove it via comps (shortsales/foreclosures/estate sales do not count as comparables), you have a shot at winning the appeal. I had 4 sold comps that I sent to the county/town. I enlisted the help of my realtor to pull the comps and she was extremely helpful in that regard.

Conversely, if comparable homes are selling regularly for over $848,793, I would keep my mouth shut. This would mean your home is under-assessed and the town may assess you higher.
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