| Author |
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Pnp
| | Posted on Friday, January 12, 2001 - 1:39 pm: |     |
If you think the town is polarizing now wait until the new neighbors move in who don't care what they pay for the house or how high the taxes are. |
Tom
| | Posted on Friday, January 12, 2001 - 1:47 pm: | |
Do the math, face.
Nina is worried that she might not be able to profit $213,000 more than she paid. OK, subtract $4000 from $213,000, you get $209,000.
You call that a penalty?
She'd have to pay that extra $4k for 52 years, without her house appreciating a penny, to negate her paper profit made in only two years.
Here's how it works: you make money, you pay taxes on it. That's how all the world's industrialized democracies do it. Throwing around words like "socialism" reflects badly on your intelligence, but doesn't shed any light on the subject at hand. |
John
| | Posted on Friday, January 12, 2001 - 2:32 pm: | |
I don't really want to get involved in this tit for tat. And, I think many of you, on both sides of the argument, have valid points. But, I just want to point out that the profits made from a house are TAXED at the time of sale. The taxes we are talking about are for the use of the same piece of property you had before the evaluation and after the evaluation. We are penalizing people for improving their homes, and therefore, the overall value of the entire township.
There is some fairness in the reassessment in that this will make everyone aware that it is to their best interest to improve all areas of town. There is also a benefit in the knowledge that once you help someone else your share of the burden should decrease. |
Jrf
| | Posted on Friday, January 12, 2001 - 2:46 pm: | |
Tom,
Your logic is way off base. Nina will only make money on her home if she sells it. She is than taxed a "capital gain" unless she uses an IRS loophole. If she chooses to stay in her home for the rest of her life, not only will she pay an additional $4000 in taxes every year, but her estate will pay a tax to inherit the property. She is taxed 3 times based on your model. |
Wilbur
| | Posted on Friday, January 12, 2001 - 2:49 pm: | |
John, homeowners get a capital gains exclusion of up to $500,000 on the sale of a principal home as long as they owned the house at least two years. This exclusion can be reused over and over again, according to tax law revised in 1997. So your statement that the profits made from a house are taxed at the time of sale isn't entirely accurate. When we sold our first Maplewood home last summer, we got a nice profit of $203K. Certainly didn't pay any capital gains taxes on it (or taxes of any kind!). It was one of the few times we loved the IRS and its rules. Now, of course, on our second Maplewood home, we stand to see our property taxes reaching stratospheric levels -- not that it's the IRS's fault. |
John
| | Posted on Friday, January 12, 2001 - 3:09 pm: | |
Wilbur, you may be correct, I was under the impression that you could only take the exclusion once in your lifetime. But then I'm not an accountant. However, if what you say is true, does that mean that no one in Maplewood will have to pay taxes if they sell their home for less than a $500,000 Profit? |
Wilbur
| | Posted on Friday, January 12, 2001 - 3:35 pm: | |
John, that is correct. It used to be a one-time exclusion of just $125,000, but was changed in '97 to unlimited exclusions of $500,000 (thank Bill Clinton; it was his administration's idea). You must, however, have lived in each house for two years BEFORE selling in order to get the exclusion. And I should point out that the $500K exclusion is for married couples who file jointly; singles or marrieds who file separately get just a $250K exclusion. So, essentially, anyone who sells for less than $500K profit does not have to pay taxes on that profit, assuming they meet the other criteria (the two years, etc). |
Joso
| | Posted on Friday, January 12, 2001 - 4:40 pm: | |
Bravo Tom and Melidiere. |
Twig
| | Posted on Friday, January 12, 2001 - 6:07 pm: | |
I agree with jrf. Whether your home's value has appreciated only matters if you sell it. Until that point, the positive aspects of an increased value seem largely to be only on paper. Sure, as some have already pointed out, it may be beneficial for equity loans or getting rid of PMI. But unless you need to do that, isn't the immediate and on-going practical implication of the added value more a negative factor in that the tax increase is on-going for years? This east side vs. west side is troubling. I have to imagine that there are more than a few families who are currently trying to decide whether to sell this spring, either to reap the available profits (probably worried that these inflated prices aren't going to last) or to avoid the tax increase. If too many do that, how might that affect the town? The argument that the revaluation is good for the entire community because it restores fairness is probably true but it also may be somewhat short-sighted. I'm not so sure that this won't ultimately turn out to have as negative an impact on the east side and central section as for the west. As Patrick Henry once said, "either we hang together or we hang separately". |
Buffalojoe
| | Posted on Friday, January 12, 2001 - 6:23 pm: | |
Anyone who doesn't think Maplewood is really two towns either has his head in the sand, or lives on the West side, blissfully unaware of their lower-income neighbors to the east. I am speaking from personal experience: When I moved to Maplewood three years ago, I rented an apartment on Van Ness Court, one block from Irvington. I lived there for one year, during which time two of my neighbors were mugged, the police were called to the complex almost daily, several apartments were "raided" by the BATF and DEA, etc, etc. Then, I moved to the West Side, where I still rent. I now live in a 3500 sq. ft house with six bedrooms in the "right" part of town. Yet I regularly hear my neighbors refer sneeringly to our family and the few other families who live in rentals on the West Side as "Renters".
Prejudice is thriving in Maplewood -- maybe it just took this reval to show us that. |
Beach
| | Posted on Friday, January 12, 2001 - 6:37 pm: | |
Yeah, and now all of a sudden they want to hear from us over here on the "East-side" so they can get a better "picture" or something. Maybe they don't drive. |
Buddy
| | Posted on Friday, January 12, 2001 - 7:49 pm: | |
Tom:
Sorry about your small PAPER gain in the last 11 1/2 years.
Are you sorry about MY taxes going up enormously because I was assessed at 200,000 above MY PURCHASE PRICE 6 MONTHS AGO???????? Shall I cash out that extra equity now and spend it only to find that my home is worth less than I paid for it given the coming drop in west side property values?
I don't think you're digging very deep into the problem here. I will pay my taxes. Always have. But fair is very subjective and there are some GLARING problems with this assessment. particularly on the west side.
That's all right though because guess what? When my home drops in value by 25% below current values, yours will go down more. And your paper profit is very quickly going to turn into a paper loss.
Got it now????????
There is no east side, no west side, only one unified town that must eliminate the anomalies in the overall assessment process.
Or WE ALL LOSE |
Ihateice
| | Posted on Friday, January 12, 2001 - 8:00 pm: | |
Maybe we should have an East board and a West board! Now there's a good idea.
Buffalojoe...I think you're imagining things. Are they in an earshot of you when they say it? I find it very hard to believe someone would do that.
Beach....you sound bitter because you CHOSE to live where you do. Not all of us on the West side are complaining, are we? |
Harold
| | Posted on Friday, January 12, 2001 - 9:53 pm: | |
Unbelievable! You would deny the sky is blue.
I've said it before....what you say in public is not even close to what you post on this board....you flatly deny that there are "two" Maplewoods?...in your own words "that's the scummy side of town where 'THOSE" people live" or the ever popular "that side of town looks like Irvington/Newark/Vauxhall[pick one]"....
gee, maybe you'll have to move to this nightmarish side of town? We'll still welcome you regardless of your attitude! |
Buffalojoe
| | Posted on Friday, January 12, 2001 - 9:59 pm: | |
>Buffalojoe...I think you're imagining things. Are they in an earshot of you when
they say it? I find it very hard to believe someone would do that.
Oh, it's true. It is difficult for me to give specifics without identifying myself and my neighbors. Twice now we have been characterized(when being spoken of to people in my neighborhood) as "those renters". It is amazing to me that because I rent (and believe me, I pay astronomical rent) it is assumed I am inferior in the community, or somehow indigent. Now, I happen to rent in a neighborhood where there are very few rental properties, but that doesn't excuse the prejudice. I rent simply because I am not planning on settling in Maplewood permanently -- that does not preclude me being interested in improving my community, or being a productive member of said community. |
Buddy
| | Posted on Saturday, January 13, 2001 - 12:46 am: | |
Buffalojoe:
Get a thicker skin.
Perhaps YOU were assuming that they thought you were inferior when in fact they just didn't know how to refer to you. Have you ever met with the people who said this? Do they know your name? Do you know the context of how they said it? Was it easier to identify you as renters rather than by name? |
Mlj
| | Posted on Saturday, January 13, 2001 - 5:25 am: | |
The point is that Buffalojoe feels uncomfortable. Don't jump all over him, please. |
Tom
| | Posted on Saturday, January 13, 2001 - 10:44 am: | |
Buddy, for my views on "one maplewood," please refer to my post in this thread, January 12 archive, entitled "The West Side has officially become..."
You may be right about my property dropping in value; you may also be wrong. It's a nice house in a not-unreasonable part of town. If people continue to want to move to Maplewood, the lower tax burden I have might be rather attractive. |
Lazybones
| | Posted on Saturday, January 13, 2001 - 10:52 am: | |
Beach:
Sorry you found my post of 2 days ago so offensive.
I'll refrain from any further commentary. |
Buddy
| | Posted on Saturday, January 13, 2001 - 11:57 am: | |
Tom,
If west side values fall so do east side values. It is a virtual certainty. Period. Your lovely home valued at 300k today would not retain that value when other homes formerly selling at $400,00 and now reduced to 300k are on the market.
The 400k home will typically be bigger and have more land. Regardless of your lower tax, buyers will go after the (former) 400k house first. Supply and demand in this case will force your asking price downwards into the 200k range.
You lose too. Contratulations. |
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