Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
There are different abatement programs. You need to have your attorney check it out. I've seen abatements that last 15 years and some for 25 years. Not sure where this 17.5% figure comes from but in new developments the difference is usually much bigger than this. For example, you can see new condos where the tax with the abatement is only 10% of what the unabated tax would be.
Can't really say what the taxes with be 15 years from now since the tax rates are assessed each year but this might help: I bought in an abated building and the abatement didn't go into effect until January 2012 however people started moving in during summer 2011. Anyway, they were stuck paying the unabated amount until the abatement kicked in. The unabated amount was around $300-$400.
For a 15 year abatement, starting on the 11th year. The RE tax you will pay will be a certain % and will increase nominally. I don't remember the exact #'s but I think it goes something like this 11th year - 20%, 12th - 40%, 13th - 60 ~~ 15th, pay 100% of your assessed tax. I'm not sure about 25 year abatements, but I would assume the same applies and it begins on the 21st year. Before signing anything you can request the amendment from the seller's attorney indicating the valued RE tax with and w/o the abatement.
There are so many different deals with different time frames and different phase ins they can make your head spin. There's not a lot of data because so many of these are newer devices geared to run 10, 20 or 30 years and most are still running. They were all instituted to keep inflating the housing bubble of the last 30 years.
As they start expiring en massse, we will see more and more news about them.
I can definitely envision a time when a large raft of them are getting close to expiration putting a drag on the entire condo market because of their unsellability. Nobody likes uncertainty when tossing away 1/2 million bucks.
Imagine trying to sell a deeply abated place whose abatement is due to expire next year...but nobody is quite sure of the looming consequences.
I have friends who are approaching the end of a good 25 or 30 year run (nobody is sure) on an approximately 75% discount on "real taxes" Their taxes will likely go from $4,000 to $16,000 (NJ waterfront Jr. 3). They are losing sleep over it.
Also, come to think about it, the estimated (unabated) tax might be in the offering plan. Ask the attorney to check.
And it wouldn't be the first offering plan to LIE...or have an asterisk pointing to fine print saying something like: "No representation is made as to future taxes. Estimates are not binding on the seller."
Of course that will be said in 1000 words instead of 15.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
