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Re: jersey city new construction tax abatement
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Thanks, the good news is it's deductible on the fed tax.

Yeah i agree what JC does with abatement makes no sense, in NY when they say a tax abatement, it really is an abatement. All the new constructions that have it, you pay like $50 a month on taxes (also luxury condos).

sammy, that's a very nice building, but you got some pretty insane taxes there.

Posted on: 2009/4/13 15:47
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Re: jersey city new construction tax abatement
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I'm at the "Shore Condo" at Newport. I've been there for 2+ years and love it.

I decided not to "opt out" of the abatement as insurance against a sudden huge increase in taxes - which could happen in this difficult financial climate. (You can't change your mind as return to the PILOT program).

But my taxes are even higher than the $7300 PILOT (on a 1-bedroom apt!). I get billed twice a year for $105 which is the tax on the land under my tower!!!!

Posted on: 2009/4/13 15:40
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Re: jersey city new construction tax abatement
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1) if the purchase price is 400k, the tax abatement payment is $6600 annual. Why even bother with the abatement at all then? isnt that just what the regular tax is.

Worse! The ordinary property taxes on the apartment are even lower! If you were to cancel the "abatement" you would only pay 1.45% of purchase price or $5,800 annually.

Fortunately, so long as the unit has paid its "abated" taxes for at least 1 year, you can go ahead and cancel that "abatement" agreement and just go on regular taxes. To cancel, send a notice to the Jersey City Tax Assessor's Office (Ed Toloza and Steve Scrocchi). Then be sure to follow up because the City will pretend they did not receive it unless you are firm with them - they do NOT want to lose the greater tax payment or share what is left with the County as they must do under ordinary taxes.

2) can you deduct abatement payment from your tax. I think it's PILOT payment (or whatever the heck you call it), and they are not tax deductible, is that correct?

The PILOTS are deductible on your federal taxes but not your NJ state income taxes. Yet another reason to cancel that "abatement."


IN GENERAL:
"Abatement" is a political misnomer that politicians use to beat up on downtowners even though they need the "abatment" taxes to pay the city's budget. These so called "abatements" are really pre-negotiated PAYMENTS IN LIEU OF TAXES, in which a frightened developer agrees to overpay his/her taxes in exchange for certainty that the City will not capriciously invent a tax increase just for his/her project. The City gets away with this because in the past, Jersey City had a nasty habit of sticking it to any business that was trying to do something here.

In recent years, some developers have been starting projects without "abatements" only to have the City go to them and demand they take an "abatement."

I note loudly however that these PAYMENT IN LIEU OF TAXES deals are NOT the same as the real Abatements available to single family homeowners and improvements of smaller than 30,000 square feet. For homeowners and micro-projects, one can get a real 5-year tax abatement in which taxes scale up from 0% to 100% of traditional taxes over a 5-year period.

Posted on: 2009/4/13 12:18
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jersey city new construction tax abatement
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I am looking at a unit by newport, it's a new construction high rise. The tax abatement is 1.65% of the purchase price. Can someone help me understand this:

1) if the purchase price is 400k, the tax abatement payment is $6600 annual. Why even bother with the abatement at all then? isnt that just what the regular tax is.

2) can you deduct abatement payment from your tax. I think it's PILOT payment (or whatever the heck you call it), and they are not tax deductible, is that correct?

thanks

Posted on: 2009/4/13 5:37
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