| Author |
Message |
    
Casey H Jones
Citizen
Username: Caseyjones
Post Number: 1
Registered: 1-2004
| | Posted on Saturday, March 13, 2004 - 12:19 pm: |     |
Does any one know how property taxes are adjusted when you remodel your kitchen and bath for example? Does the process begin as soon as you take out the permit or after the final inspection, or at some later time frame? What determines the tax hike? |
Joan
Citizen
Username: Joancrystal
Post Number: 2581
Registered: 5-2001
| | Posted on Saturday, March 13, 2004 - 1:50 pm: | |
Your property taxes are tied into the value of your property as determined by the town assessor. When you make significant improvements to your house like completely re-doing an old kitchen or adding on a room, the value of your house increases and your property taxes go up. The re-assessment is likely to be made at the time of the building inspection which determines that your remodeling was done according to code. If you are are not making changes to the structure, electric, HVAC and the like, you may not need an inspection and thus may not see an increase in your taxes as a result. |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2416
Registered: 1-2003
| | Posted on Sunday, March 14, 2004 - 1:51 pm: | |
This is ironic. You deplete your money (to an extent) to improve your home, and this increases your theoretical ability to pay, when, in fact, your ability to pay may have decreased.
Tom Reingold the prissy-pants
There is nothing
|
Joan
Citizen
Username: Joancrystal
Post Number: 2585
Registered: 5-2001
| | Posted on Sunday, March 14, 2004 - 2:05 pm: | |
Tom:
It's not about ability to pay. Real property taxes are based on the value of the real property. Period.
This is why so many people in town are concerned about the continual rise in real property taxes and the impact of this tax increase on the ability of pre-reval residents (especially those who are elderly and on fixed incomes) to be able to afford to remain in their homes.
At the moment we are in a vicious cycle. Empty nesters cannot afford the school taxes so they move and are replaced by young families with children who in turn put more demand on the resources of the school system which raises the taxes which forces more empty nesters to leave ... |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2417
Registered: 1-2003
| | Posted on Sunday, March 14, 2004 - 2:45 pm: | |
I agree with what you say, Joan. My point is that property tax was founded because value of one's home used to be a good indicator of ability to pay. Today, it is a very poor indicator of that, yet we rely on it heavily as if it still were a good indicator.
Tom Reingold the prissy-pants
There is nothing
|
Joan
Citizen
Username: Joancrystal
Post Number: 2588
Registered: 5-2001
| | Posted on Sunday, March 14, 2004 - 5:03 pm: | |
Real property value may be a relatively good indicator for people who recently bought their property since presumably they could afford to pay the cost of mortgage plus taxes plus upkeep quoted to them when they made their purchase. Unfortunately, when we have long periods of inflation or when outside influences such as Midtown Direct drive up the value of real property, it becomes much more difficult for long term residents to remain in their homes.
If Couple A bought a home in Maplewood last year for $350,000 and the assessed value of the property is close to that, assuming their financial situation remains somewhat stable, they should be able to continue to afford living in their house for the forseeable future and the value of the house should be a reasonable indicator of their ability to be able to pay taxes on that value.
However, if Couple B bought the virtually identical house next door 25 years ago for $65,000 dollars even if their finaicial situation has remained relatively stable, their house thanks to reval is now valued at $350,000 and they now have to pay taxes on the $350,000 value of their home even if there is no way they can afford to do so.
Given the rate at which real property taxes in this town have been rising every year, it will be a relatively short period of time before those in the couple A category join those in the couple B category and not too much longer before couples A and B move out making way for the more affluent couple C group. Eventually, the town will run out of couple groups and we will have priced ourselves out of the housing market altogether.
That is a very real problem which we all face.
|
mellie
Citizen
Username: Mellie
Post Number: 432
Registered: 4-2002
| | Posted on Monday, March 15, 2004 - 8:02 am: | |
funny how my use of the school system increases because I added a bathroom... |
Joan
Citizen
Username: Joancrystal
Post Number: 2590
Registered: 5-2001
| | Posted on Monday, March 15, 2004 - 4:37 pm: | |
Mellie:
Real property taxes are used to pay for the school system but they have little relationship to the individual homeowner's use of the schools. One could argue that the higher assessed houses in town have more bedrooms and thus house more children but that analogy really doesn't hold up when you do an in depth analysis of who pays what towards supporting the school system, |
mellie
Citizen
Username: Mellie
Post Number: 434
Registered: 4-2002
| | Posted on Monday, March 15, 2004 - 4:57 pm: | |
I think this is TomRPPs point - if you actually try to improve the housing stock you get a double whammy - the cost of the renovation and the cost of the additional tax. So if you choose not to maintain your property you are increaseingly subsidized by those who do.
So, divide the school bill evenly over all the houses to produce an even charge, and vary the municipal and county portion on assessed value, or...
do not increase taxes on improved homes until they sell. Thus we incentivze everyone to improve and maintain their homes rather than subsidize those who don't.
Actually you could argue that those who don't maintain their homes should pay the same municipal tax as those who do because those homes might be more likely to have fires or flooding, whereas improved properties might not.
Otherwise we begin to sound like a perverted form of the phrase "socialism - misery equally shared" as in "Maplewood taxes - misery unequally shared" |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2426
Registered: 1-2003
| | Posted on Monday, March 15, 2004 - 5:04 pm: | |
You're right about my double-whammy point, mellie, but I don't think we should pay an equal amount per house, either. I object fundamentally to paying for these services chiefly through property taxes. I'd like to see a huge reform that relies much more heavily on income taxes. Some people say this is very unlikely, and I can understand why. Wealthier people might end up paying more overall than they already pay, so they wouldn't vote in such a change. Others say such a reform is inevitable, because the people can't bear further property tax increases. I'm not good at making predictions, so I generally stick to discussing what I'd like to see, not what I expect to see.
Should we take this discussion elsewhere? It doesn't feel right here, in the government section.
Tom Reingold the prissy-pants
There is nothing
|
Joan
Citizen
Username: Joancrystal
Post Number: 2591
Registered: 5-2001
| | Posted on Monday, March 15, 2004 - 6:25 pm: | |
The system for funding schools which would be most advantageous for Maplewood and South Orange would be disadvantageous for the large urban areas in the State, like Newark and Camden, where the majority of the State's residents live (think voters!). These areas have relatively low real property taxes due to lower land values and high State subsidies. This is the major problem we face in trying to implement real property tax reform. |
Cynicalgirl
Citizen
Username: Cynicalgirl
Post Number: 484
Registered: 9-2003
| | Posted on Tuesday, March 16, 2004 - 6:18 am: | |
It would be helpful to know what the average cost of services (including education) per capita in Newark, and to compare to the proportions paid for by Newark residents v other. I wonder if they are the same, each component's cost for starters, and then what the gap looks like. As with Tom, I'd prefer to see higher income taxes. Present system breeds an us v them.
I got thinking, too, about complaints about outsourcing and this. We who live around here want to make more money, more money, more money in part to keep pace with ever increasing property taxes. With respect to IT (and seems like there's a bunch of us in it), we price ourselves out of the market, companies go overseas. Then what? Well, we could lose our homes, or move to the hinterlands.
I keep thinking that US IT should more closely consider relocating to the non Metro NYC, Boston, San Fran areas where the cost of living is a lot lower especially taxes. And, trust me, the schools are just fine. So what happens next? A lot of property tax stressed homeowners relocate to the non Metro areas, taking their taxes with them. The value of the housing stock starts to decline due to fewer people willing to prop it up. Less taxes to Newark, etc. Then what?
Personally, I think this could start to happen. As real income declines, folks are going to get less and less able/willing to pay these property taxes. Us v them kicks in in a big way, intergenerationally and otherwise. I think we see it already. Stalwart long time residents speak of the virtues of Maplewood. Some newer people are yes, but. And if more and more expensive people move here, not so much for the diversity (which wasn't one of my core criteria, but more for the housing stock and proximity to NYC), they would seem less likely to roll over and pay the taxes without a fight. Maybe, less likely to move here, period.
Guess my speculative point is, I don't think the increase in property tax curve should assume all other factors remain constant. Some sort of "elasticity of cost" curve on ability/willingness to pay these taxes. |
bobk
Supporter
Username: Bobk
Post Number: 4987
Registered: 5-2001
| | Posted on Tuesday, March 16, 2004 - 7:27 am: | |
Joan, the state (meaning us taxpayers) already pay for the vast majority of educational expenses (90%+?) in the large, blighted urban areas via the Abbott program. Because of this I think the overall educational expenses funded by the state is around 50% since as you point out the large cities have a high percentage of the state population. |
mellie
Citizen
Username: Mellie
Post Number: 437
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 8:38 am: | |
Tom et al - I suppose where I am going is - if we have to fund it with property tax, to what extent do we have any latitude locally to alter how the individual burden is calculated, or does the state tell us that too. |
Nohero
Citizen
Username: Nohero
Post Number: 3041
Registered: 10-1999
| | Posted on Tuesday, March 16, 2004 - 8:56 am: | |
The property tax burden is based on property value. For example, if Property A is worth twice as much as Property B, it has twice the tax burden. That's how NJ law requires property taxes to be apportioned. |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2435
Registered: 1-2003
| | Posted on Tuesday, March 16, 2004 - 9:31 am: | |
mellie, I don't know how hard it would be to put in place a division of burden like that. It doesn't sound like a good idea, though. I think it moves in the direction of less fair, not more fair. The problem we have now is that some people live in houses that they've owned a long time, whose values have gone up even though they didn't pay much to get in them, but they're paying high taxes because of how much they WOULD pay for the houses. Now you want to replace that with a system whereby people who paid low amounts for houses that are only worth a low amount would pay the same taxes as people who are well off?
Tom Reingold the prissy-pants
There is nothing
|
mellie
Citizen
Username: Mellie
Post Number: 439
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 9:43 am: | |
got it Tom -because the levy is for education, not for income. It goes back to...if I add a bathroom, how does my consumption of the school system increase ? er, it doesn't.
I know that law does not allow this, but I thought it would be worth exploring a bit.
I think that it has some merit in principle in a town like Maplewod because we are always saying what a great town it is to raise children in (and it is despite our wailing and moaning). So, if you buy that concept, you have to buy that its biggest asset is the education system - so we should all chip in equally for the privilege of using it or benefitting from it (and we all benefit from better education even if we have no kids in the system).
So, even someone in the cheap seats is getting good education- or knew that a major factor in keeping their property values and neighborhood up is this prize asset.
Since we all benefit from it equally (in terms of relative prop values (and arguably the cheap seats do relatively better if you look at the sale price to assessed value ratios), why should we not all pay the same.
Otherwise it is essentially an income tax with without the ability to deduct the cost of caital improvements- in fact it increases your tax rate if you improve your house
Just a few thoughts for the day. |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2436
Registered: 1-2003
| | Posted on Tuesday, March 16, 2004 - 9:48 am: | |
mellie there is consensus in society that an education is a right. Therefore, society provides it, through taxes. In theory, your ability to pay school taxes should not affect your ability to get the education. Also, an education is an investment in individuals and in society as a whole. A flat "head tax" is terribly regressive.
I agree that being taxed on an improvement, such as the one you speak of, is unfair. But I think your proposal replaces something bad with something much worse.
Tom Reingold the prissy-pants
There is nothing
|
mellie
Citizen
Username: Mellie
Post Number: 441
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 10:08 am: | |
why is it bad to be a flat tax ? we all pay the same for a candy bar ?
|
Tom Reingold
Citizen
Username: Noglider
Post Number: 2438
Registered: 1-2003
| | Posted on Tuesday, March 16, 2004 - 10:24 am: | |
Because it's no shame if you can't afford a candy bar, since that's a luxury. A head tax isn't a flat tax, either, since it isn't a percentage of income. That's what flat tax means. A head tax would cost a higher percentage of income for lower income people. Education for the poor reaps more return on investment than for the wealthy, so we ought not to resent it.
Tom Reingold the prissy-pants
There is nothing
|
mellie
Citizen
Username: Mellie
Post Number: 442
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 10:32 am: | |
but it's all right to price people out of their homes?
conversely you are saying that your right to get an education shouldn't affect your ability to pay taxes -yet in fact the right to an education is causing some peoples taxes to be unaffordable.
So, it's all right to cause people to sell their homes because they can't afford the tax becuase is it such a high percentage of their income, but we must ensure that we don't make the education tax too high a percentage of their income that they can't afford it.
Your logic is flawed.
|
ashear
Citizen
Username: Ashear
Post Number: 1060
Registered: 5-2001
| | Posted on Tuesday, March 16, 2004 - 11:11 am: | |
Mellie - your point seems to be that under our current system people are forced out of their homes by rising taxes and that is not fair. I agree. But if we split the total tax burden over every home in Maplewood that would not change. It would greatly increase the taxes paid by those in the least valuable home. It would just be different people who would be unable to pay their taxes. How is this better? |
jfburch
Citizen
Username: Jfburch
Post Number: 1339
Registered: 6-2001
| | Posted on Tuesday, March 16, 2004 - 12:43 pm: | |
(bobk, the overall educational expenses funded by the state is closer to 39% than 50% (the national average) and low by national standards.) |
mellie
Citizen
Username: Mellie
Post Number: 443
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 12:49 pm: | |
how is it worse ?
|
Tom Reingold
Citizen
Username: Noglider
Post Number: 2439
Registered: 1-2003
| | Posted on Tuesday, March 16, 2004 - 12:49 pm: | |
quote:conversely you are saying that your right to get an education shouldn't affect your ability to pay taxes
I suppose I'm saying that. In other words, even if I can't afford to pay for my education, my right to that education still exists. The alternative is to turn poor people away from the schools.
As for pricing people out of their homes, there is no protection from that.
If you're unable to pay your property taxes, you're in trouble. But there is no such thing as being unable to afford your income tax, because if you're poor, you don't owe any income tax. This is why I favor leaning more on income taxes. In doing so, we would lower property taxes, making fewer people leave their homes, even middle and upper income people.
Tom Reingold the prissy-pants
There is nothing
|
bobk
Supporter
Username: Bobk
Post Number: 4992
Registered: 5-2001
| | Posted on Tuesday, March 16, 2004 - 12:49 pm: | |
Thanks Julia, with you around I can't get away with throwing out half remembered numbers. 
Still, most of this money goes to the Abbott Districts. I don't have a problem with this, however, it does show when forced to the state can fund education, even if the results aren't very encouraging. |
mellie
Citizen
Username: Mellie
Post Number: 445
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 1:23 pm: | |
Tom I am still confused - you have no objection to pricing people out of their homes at one end of the scale, but you do object at the other.
But that does not affect the entitlement of either party.
So you are saying that I am entitled to an education in Millburn, even though I can't afford to live there?
Or am I only entitled to an education where I can afford to live ?
|
TomR
Citizen
Username: Tomr
Post Number: 159
Registered: 6-2001
| | Posted on Tuesday, March 16, 2004 - 1:26 pm: | |
mellie,
To augment ashear's statement of the obvious, your proposed redistribution of our School Tax burden results in:
Increasing the taxes of approximately 3700 out of about 6800 residential properties, based upon the average school tax bill; or
Increasing the taxes of half of our residential properties, based upon the median school tax bill.
Also, just in case someone pops up with an idea to redisrtibute thye school taxes on a per capita basis, that would be about $1,500.00, per person (man, woman and child).
Hey! I lke that last one. I save a bundle.
TomR. |
Tom Reingold
Citizen
Username: Noglider
Post Number: 2440
Registered: 1-2003
| | Posted on Tuesday, March 16, 2004 - 1:34 pm: | |
You're not entitled to live wherever you want, but once you live somewhere, you're entitled to an education there. I assume and hope that if you are homeless, there is a way to get you into public schools, but I don't know about that.
I hope we can institute a system whereby property taxes don't continue to rise sharply. This would enable people to stay where they are. So in that respect, I do object to people being priced out of their homes, but I won't go as far as to say affordability of property taxes is an entitlement. I think the system is messed up in that 1. property taxes are high and rising sharply and 2. so many essential services rely on them. In number 1, you and I are probably in the same boat.
My preference is to see property taxes be cut drastically and income taxes be raised correspondingly. If this were done, people could stay put more easily. At the same time, adding a bathroom wouldn't raise the property tax much, if at all.
Tom Reingold the prissy-pants
There is nothing
|
mellie
Citizen
Username: Mellie
Post Number: 447
Registered: 4-2002
| | Posted on Tuesday, March 16, 2004 - 2:04 pm: | |
yes I tend to agree with your sentiments Tom(s) |
sac
Citizen
Username: Sac
Post Number: 1021
Registered: 5-2001
| | Posted on Tuesday, March 16, 2004 - 2:08 pm: | |
Homeless people in New Jersey are entitled to attend school in the town of their last residence, I believe. There may also be other measures to ensure that those children are not denied the education to which they are entitled.
The reason that everyone is not charged the same "per household" is that there is a philosophy that taxes should be levied on an "ability to pay" (progressive) basis. The problem is that property taxes are no longer a very good mechanism for "ability to pay". That is why an income tax is fairer, but the state has not authorized localities to use anything other than property tax to support local services, including education. Higher income folks might not be happy about an income tax, since they might pay even more than they currently pay via property tax, but (and this is the important "but"), if their income drops, so would their taxes. All of you who are bemoaning the need to move elsewhere for retirement should be lobbying for such a change. I know that I would prefer it, even though I probably would pay more tax in the short term, because I would have a more reasonable chance of being able to afford to stay here in the long term. |
Closed: New threads not accepted on this page