Hundreds of angry residents on Tuesday night protested sharp increases in property taxes here after a revaluation.

?It?s absolutely absurd,? shouted Ron DiMedio, who said the annual property taxes for his Kings Highway home had jumped from $16,500 to about $24,000.

?You?re telling me to get out of town,? DiMedio said.

His heated comments drew loud applause from an audience of about 600 people in St. Rose of Lima Church.
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Mayor Beth Ann Haven said the borough government would contact Camden County and state tax officials in an effort to undo the tax change.

?This is a county-ordered reval and it?s approved by the state,? she said.

?Ultimately, we want to find out if we can void this reassessment and have another,? she said after listening to residents? complaints after about three hours.

?There?s a lot of confusion,? said the mayor, who suggested homeowners may have calculated their taxes incorrectly.

?We did not,? several audience members shouted back.

Several speakers questioned the accuracy of the revaluation, contending properties were assessed at too high a level in a real estate market that his since weakened. ?The estimates on these homes are wrong,? said Glenn Davis, a Lake Street resident.

In practice that RARELY ever happens because responsible municipalities would typically have to go through a revaluation at least once every real estate cycle. In Jersey City, we are all still waiting, waiting, and waiting for the pols to do the responsible thing and reset the taxes - or go to the State for sweeping property tax reform like they did in California 30 years ago (Proposition 13).

JCLAW wrote:
There is no such clause in the PILOT agreements. If ordinary taxes are higher than the PILOT payment, the owner's only recourse is to terminate the agreement and go on regular taxes, which can be done anytime from 1-year after the date the apartment has its certificate of occupancy.

EFFECTIVE Ordinary JC taxes keep dropping because the local politicos have resisted a revaluation for so long (because they don't want their own well appreciated town houses revalued!). As a result, 2007 taxes in JC are 1.3% on a newly built condo or building under ordinary taxation. This is based on the current rate of .522% and the 2007 equilation ratio of 25%.

.522% x 25% = 1.3%

JCLAW wrote:
I find myself responding to these posts because there is so much misinformation out there. Here is another perfect example.

In condominium projects, the real estate tax "abatement" aka. PILOT program goes to the BUYER not the builder. In fact the BUILDER has to pre-pay the city an entire year of taxes in exchange for this "abatement" which applies to the BUYER. The PILOT for condos is based on a complicated formula derived from the purchase price, the monthly maintenance charges and current interest rates. You can call the local tax assessor and he will calculate the numbers for you, as they can change.

The number 1.65% is about right, and if it seems high to you for taxes, its because it IS high. In fact, its HIGHER than regular taxes on a new "UN-abated" condo. An new unabated condo today would pay taxes based on the current published Equilization Ratio x Tax Rate, which is .28 x .0522 = 1.46%

So, as you can see, there is no such thing as an "Abatement" in Jersey City. The good news is, as a buyer you have the right to cancel your "abatement" anytime after 1 year from date of purchase, so after the 1st year you can go down to regular JC taxes like everybody else.

The biggest problem with condo "abatments" is the name. JC is so screwed up that buyers feel they need to hear the word "abatement" when buying a condo, so builders go to the city to get an "abatement" and the city says ok, I'll give you one but only if the "abatement" charges you more taxes than regular taxes. The builders have no choice so they get this PILOT "abatement" and then just assume the buyers will cancel it as soon as they buy. The only benefit of the PILOT program is that it protects the buyer from massive city tax increases in between the time that the buyer signs the purchase contract and the closing date - so at least you are protected for the perhaps 12-month wait until your move-in date.

If you are a new buyer in any of the new condo developments on the JC waterfront, after you move in, I strongly recommend that you write a note to the JC tax department (c/o Mr. Ed Toloza) and cancel your abatement at the legally permitted date which is one-year after you take title.

icricket wrote:
Quote:

wibbit wrote:

.

actually it is deductible on federal tax return - this has been discussed here and there many times. rule of thumb - irs considers them as re taxes in private rulings. to forstall confusion, all that is necessary - is to obtain a letter from irs, stating this. which is usually done by condo association. last i talked to my lawer - the developer is working to obtain one.
on the other hand it might not really matter that much for those caught by alt min tax - only very small portion of re becomes deductible, based on your private calc. it can be as small as 30%. you'll have to check with accountant.

JCLAW wrote:
"As a real estate tax payer, I am concerned about the whole nut; city, school, county (and state) taxes. What good does it do for me if PILOTs surpress my city taxes and force my school and county taxes higher.

You stated expert knowledge in this area, please explain. "

I thought I had answered this before but once more just for good measure. Here goes:

The Jersey City School system is controlled and paid for by the State of NJ using money from the state income tax and other sources. So basically as it stands, people in Princeton are paying for JC's schools. When the City's budget started improving due to the cash influx from waterfront PILOTs, Mayor Cunningham took the City off the NJ Distressed (aka Dysfunctional) Cities Program. The State of NJ said "Woah, if you can skip out on the program because of all your new PILOT money, you need to start paying for you own school system." Well, the Cunningham administration wasn't about to force these expenses on regular voting taxpayers, so it imposed a 5% surcharge on top of all PILOT payments (a tax on top of a tax - so to speak) which goes towards defraying the State of NJ's costs of running the JC school system. Right now the NJ school system costs the state about $70 million/year and the PILOTs are generating a few million dollars against that which cuts the State's cost.

As far as the county goes, again during the Cunningham administration, the City of Weehawken sued Jersey City claiming that the PILOT program made it possible for JC to keep all the $ and Weehawken wanted to get its hands on the same loot. So to keep political peace, the Cunningham administration imposed a 2% tax on PILOT payments to enrich the County coffers. In any case, I need to correct your understanding about the County's revenue stream as follows. If the PILOT payments were converted to a regular tax payments, your regular taxes would skyrocket because JC would need to triple its local taxes in order to satisfy the county's 60% share of regular tax revenues and still pay off its own needs. Remember, the county gets a tax share but it doesn't set the rates. It's an illogical system, but the only one we have.

Hoping that helps.

wibbit wrote:

4) Abatement/PILOT is *NOT* deductable, so dont expect that fat tax return check. This makes them MUCH less desirable than paying normal property tax for those in the ~20%+ tax brackets.

JCLAW wrote:
....If you are a new buyer in any of the new condo developments on the JC waterfront, after you move in, I strongly recommend that you write a note to the JC tax department (c/o Mr. Ed Toloza) and cancel your abatement at the legally permitted date which is one-year after you take title.

JCLAW wrote:
I find myself responding to these posts because there is so much misinformation out there. Here is another perfect example.

In condominium projects, the real estate tax "abatement" aka. PILOT program goes to the BUYER not the builder. In fact the BUILDER has to pre-pay the city an entire year of taxes in exchange for this "abatement" which applies to the BUYER. The PILOT for condos is based on a complicated formula derived from the purchase price, the monthly maintenance charges and current interest rates. You can call the local tax assessor and he will calculate the numbers for you, as they can change.

The number 1.65% is about right, and if it seems high to you for taxes, its because it IS high. In fact, its HIGHER than regular taxes on a new "UN-abated" condo. An new unabated condo today would pay taxes based on the current published Equilization Ratio x Tax Rate, which is .28 x .0522 = 1.46%

So, as you can see, there is no such thing as an "Abatement" in Jersey City. The good news is, as a buyer you have the right to cancel your "abatement" anytime after 1 year from date of purchase, so after the 1st year you can go down to regular JC taxes like everybody else.

The biggest problem with condo "abatments" is the name. JC is so screwed up that buyers feel they need to hear the word "abatement" when buying a condo, so builders go to the city to get an "abatement" and the city says ok, I'll give you one but only if the "abatement" charges you more taxes than regular taxes. The builders have no choice so they get this PILOT "abatement" and then just assume the buyers will cancel it as soon as they buy. The only benefit of the PILOT program is that it protects the buyer from massive city tax increases in between the time that the buyer signs the purchase contract and the closing date - so at least you are protected for the perhaps 12-month wait until your move-in date.

If you are a new buyer in any of the new condo developments on the JC waterfront, after you move in, I strongly recommend that you write a note to the JC tax department (c/o Mr. Ed Toloza) and cancel your abatement at the legally permitted date which is one-year after you take title.