| Author | Message | ||
     Njjoseph |
According to the New Jersey Law Report, December, 1998, the wait period is only after a judgment in an appeal, and applies to both the taxpayer and the municipality, unless there are substantial changes in value of the property. It seems that 20% to 30% increases in neighboring properties might qualify, but the act applies only for tax appeals, not for regular revaluations. The text from the report follows: "New Jersey's Freeze Act requires that a judgment in a tax assessment appeal is binding upon the taxpayer and the municipality for the two succeeding tax years, unless there are substantial and meaningful changes in the value of the property which occur after the assessment date of the year to which the underlying judgment relates, or if the municipality implements a district-wide revaluation in a year to which the Act might apply. The types of changes that would vitiate application of the Act would be a zoning change, substantial construction on the property, or potentially a change in the highest and best use of the property. Taxpayers have relied upon the Act to appeal judgments (either of the County Board of Taxation or of the Tax Court) to obtain two years of additional tax relief, in addition to the relief for the year in which the judgment was obtained. A recent decision of the Appellate Division affirmed application of the Act where a zoning change affecting the subject property occurred after the original judgment." | ||
| Bobk |
Njjoseph: Thanks, you are another research wizz, along with Melidere. | ||
| Njjoseph |
Aw, shucks! | ||
| Mammabear |
Overtaxd and Aruba- My income tax example was mentioned as a smiliar scenario only. I didn't mention it as it pertains to whether you can afford your increase or not. My point was that the more money you make, the more you pay in taxes. The same is true with real estate taxes. Higher property values = higher property taxes. Get it? How or whether you can pay your taxes is your own issue. I'm not saying I don't feel terrible for people who can't afford the increases. I certainly do. I also feel for those with gross inaccuracies on their new assessments. What I find hard to swallow is that MOST of the people out there who have received large increases are the same ones who are sitting pretty with their nice real estate investments. | ||
| John |
Maybe one solution could be a property tax on the profit one makes when they sell their home. No more fluctuations in values changing the share of taxes one pays, and those who profit still put in to the community at the real value of their investment. When does one pay taxes on profits from other investments (such as stocks)? Anyone know? Under the current system, if you don't sell in a hot market you are penalized. The value of that same property may go down when you go to sell and yet you've paid exorbitant taxes while you didn't get the real income. When income goes up, taxes go up. I think that compares better to the income tax scenario. | ||
| Overtaxdalready |
Yeah, I get it. Your example was a poor one. | ||
| Octofoil |
Mammabear, There is a flaw in your logic; it is a bit hidden but nonetheless a flaw. The correct form of your equation should be: higher property values~higher real estate taxes. The "~" represents a "maybe" condition. That is, higher property values might equal higher real estate taxes, unless a) the TC hasn't done a reval for 20 years and isn't going to do one this year, b)you are a senior qualifying for a freeze or rebate program or c) some other unknown mitigating factor. If none of these conditions holds, then your equation is true. Having said that, it is your last paragraph that really contains the flawed logic. You attempt to make the case that the majority of residents with big tax increases are also those with the biggest unrealized gains on their homes, and by implication, are therefore the most able to afford the big tax increases. Unfortunately, one doesn't necessarily follow the other. The only way to pay your real estate taxes via your unrealized gain on your home is either sell it, or to use it as collateral for a loan. Its kind of like buying zero coupon bonds. If you are a taxable entity and purchase a zero coupon bond, the tax value of that bond will accrete by some amount each year until it matures. But, because you receive no income from it, you have to look to other sources of funds to pay the annual income tax on that accretion. Same thing with property taxes: you have to look to your savings or your annual income to pay the taxes. When taxes go up by relatively modest amounts, its not too difficult to adjust expenditures to accomodate (buy more Ripple, less Grand Cru). But when you get whacked with an unexpectededly large increase that adds a significant number of hundreds of dollars a month to your monthly payment, that can (depending on one's circumstances), be a near-death blow. Now, I recognize that one intent of your post is to chide, none too gently, that group of folks who can well afford the increase, large though it might be. But please recognize the fact that while some might be "sitting pretty" with their "nice real estate investments", they may not be able to afford the tax payments-without liquidating their investment or borrowing against it. So some have asked, "Well, why not move to a less expensive part of town, where you can afford the taxes?" Not a bad question, but it completely ignores the fact that I may not want to move,this is my home. This is the home that my kids grew up in and come home to. So, bottom line: two kids left in high school. When they're out, we're out. For sale sign goes up. And no, we're going to to relocate here in M'wood. I resent the fact that this move is forced upon me by bureaucrats who thought that they could "skate" (to quote a member of the TC) on the revals over the years. I may well agree with the spirit and intent of the reval on an equity basis, but does that make me anymore able to pay for it and resent the intrusion into my families life any less? No, by god, it doesn't. I only wish that we could expect to receive the kind of dough that CV/Galante says the place is worth! | ||
| Townie |
There's an additional problem in Mammabear's analysis, which is that higher property values do not automatically translate into higher taxes. Had all property values in Maplewood risen evenly, no one's taxes would have increased or decreased. The fact that some appreciated in value less than others is what's causing some people to get large increases. | ||
| Melidere |
and that, dearest townie...is the piece of this puzzle that everyone is missing. Had octofoil or mtierney bought a different house in the same town they may be looking at far less equity, far fewer options and a far less secure retirement, in addition to the inordinately high taxes relative to the value of their homes. I don't understand what they think is more 'fair' about that. octo, you missed a third option which is a reverse mortgage. That would not be a loan, would not require increased cash flow, and would not require them to move. It merely allows them to tap the huge growth in equity that is trapped in their property. some people made a windfall profit on midtown direct through no effort of their own. Their entire financial futures are more secure as a result. The rules of property tax are that when that happens you give some of it back in the form of taxes. i can't imagine how mtierney could possibly say she might be better off had she bought on boyden, watched her property values stagnate, paid overly high taxes for some period of time and then got to see them go down. She may get to live in her house for the rest of her life...or she may HAVE TO live in her house for the rest of her life...because it's nigh impossible to find decent housing anywhere for the 140-180 that a lot of these houses are selling for. While the tax increases have been piling on them for the last 10 years...there were no options but to simply bite the bullet and pay them. Cut out prescriptions, cut out expensive fruits, cut out any sort of non-essential and some essential needs in order to pay the tax on the only housing you can afford, since your property has not increased enough to allow you options. I cannot for the life of me figure out what anybody thinks is so 'fair' about that. | ||
| Lydial |
Mel - I don't know about the rest of the town - but the reverse mortgage option doesn't apply to me and I assume I'm not alone. My house has been assessed at $110K more than I paid for it in 1999. My bank says it's only increased $10K since 1999. What equity? I've got my down payment and very little principal has accrued in that time. The only difference is my taxes are going up by..who knows what the rate will be? We paid close to $10K in taxes last year, it seemed high but we could swing it, now I really don't know what to do. We're still recovering from the financial push it took to buy our first house (a fixer-upper) and moving in costs. Now this fixer-upper isn't going to get fixed up and we might have to sell. | ||
| Gerardryan |
Lydial: I am not sure what you are asking, exactly. Were you told that you were reviewed and no change resulted? Or were you told that they had not gotten to your request yet? If the former, call me and we can talk specifics. If the latter, I understand that Galante expects to have everything done by 3/24. Also, if I remember correctly, don't you have an opportunity to eliminate a PMI situation? Trading a non-deductable PMI for a deductable property tax might lessen the sting somewhat... | ||
| Lydial |
Jerry - it's the former - I received a letter that confirmed Galante's office considered my assessment review but no numbers changed. I'll call you today. I've been in the inner circle of PMI Hell since I received my unchanged assesment last week. The bank says my house is worth $329K. Period. Spoke to some mortgage brokers - it's going to cost me around $2,000 to refinance and my loan rate will increase and be variable instead of fixed. Called the Federal Trade Commission, Consumer Protection agency, NJ Dept. of Banking...no one can change the PMI because the bank assessment won't change. Now I'm been considering lawyers to help me with my county appeal - using a contingency fee, it looks like I'll pay them anywhere from $1,000 to $3,000 bucks. I feel like I was misidentified in a line up and nobody beleives my alibi. | ||
| Melidere |
i'm having a tough time understanding why the bank won't change their stance with an appraisal. | ||
| Njjoseph |
Lydia, I feel for you and know that you'll probably be on a very long, frustrating path to have your assessments (town and bank) corrected. You seem like a real go-getter, and I feel confident you'll be satisfied with the end result, although you may tire of the challenges ahead. Do take up Jerry's offer for help, and hopefully this will reduce the strain. I wish I could offer you help, but I can only offer you support here. Best wishes to you! | ||
| Napes |
Melidere, you're way off base suggesting a reverse mortgage. These are generally not available to anyone under the age of 75 - and surely many of the people posting here are younger than that. Also, the amount which you get from a reverse mortgage is capped based on the MEDIAN home price in your area (I forget how they define "area"), which can be far lower than the actual assessed value or market value of your particular house. You also pay closing costs and interest on a reverse mortgage. | ||
| Livinwestwless |
Mel- Maybe her house is worth $329K and has been over assessed by CVI. Probably not but it is possible. The bank sees a fixer upper, CVI seemed to look past all that if you were in the right (or wrong) neighborhood. | ||
| Melidere |
First of all, napes, any bank can put any terms on a reverse mortgage that they like. this faq generally refers to federally insured mortgages, which do set the standard, but are not binding on banks. http://www.reverse.org/faqs.htm#Whoselig they say the age limit is generally 62. i'm not quite sure why the capping at median is a problem, or how it could exist. you might be referring to some federally subsidized program or something which would give a rate advantage to qualified borrowers. Fannie mae refers to a maximum loan amount http://www.fanniemae.com/singlefamily/products/markets/emg_home_keeper_purch.html as they do on all their programs...but the median might be an amount used to calculate the annuity in some particular program. At any rate...if you took out a reverse calculated to a low appraisal value...you (or your heirs) would always have the option of selling it and paying off the reverse. the AARP refers us to a proprietary reverse which is a newer program "They generally provide larger loan-advance amounts only if your home is worth a lot more than the average home value in your county." a reverse mortgage is a financial innovation, not a federal program, designed specifically to address the concerns of seniors who want to stay in their homes and need to tap the equity in it. | ||
| Lydial |
Mel - I'm having a tough time understanding why the bank won't budge either -- they claim it's for their investors' protection. If I regurgitate the list of their spurious explanations one more time my mind will implode and I will have a ball of madness endlessly richocheting inside my brain. Condensed version: bank says $329K and I say $427K. Reverse for my town tax argument: I say $329K and town says $427K. I'd settle on $400K and be happy all around. Njjoseph, thanks for the kind words! I won't give up and this'll pan out somehow or other. | ||
| Melidere |
lydial i don't mean to keep coming back to you, but some things don't make sense. There has to be language in your pmi agreement that stipulates exactly how you go about establishing that there is 20% equity in your home. It's just hard to believe that an appraisal doesn't suffice. they can't continue to collect pmi from you forever. | ||
| Njjoseph |
Lydia, another thought, and maybe you've mentioned it already and I missed it: have you gone to another bank to ask about refinancing, thereby getting another appraisal from another company? You'd have to pay points to close on the new loan, and it may be prohibitive. But I wonder about your current finance company -- they shouldn't have their heads buried so far in the sand -- I'd consider changing. |
