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Re: shore club - property tax too high?
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Here's an interesting trend in property taxes for NJ - Haddon Heights tax hikes spark ire

Quote:
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.

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.


Wonder when Hudson County is gonna get around to a reval?

Posted on: 2007/6/20 21:36
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Re: shore club - property tax too high?
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New Jersey is the most corrupt state in the US.

The pensions for state workers run over $100,000/year.

WTF?

What a piece of shite state.

Posted on: 2007/6/15 21:51
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Re: shore club - property tax too high?
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"I'd have to say the local sheeple are happy to jostle for position in-line on their way to the gubermint tax shearing conveyor belt"


Especially so in New Jersey. New York actually managed to cut property taxes twice in a row the last two years.

NJ is so anti-business, anti-growth now that they are just raping the taxpayers and property owners repeatedly to pay the unbelievably bloated pension and long-term healthcare benefits of too many current and retired government patronage workers. Did you catch the article on the cover of the NY Times this morning about McGreevey's $billion failed pension buyout mistake?

And the worst part is, the local pols here in JC have the voters totally snowed about their irresponsible nepotistic and paternal hirings and consequential budget mismanagement all of which is paid for by means of force-feeding 'abatements' to developers. AND THEY WONDER WHY COMPANIES ARE AFRAID TO LOCATE JOBS HERE!?

Rant over. Good luck to you Tazmanio.

Posted on: 2007/6/15 21:47
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Re: shore club - property tax too high?
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Quote:
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).


Prop 13 was brought about by the grassroots and forced on the State of California, which was in the process of going exponentially collectivist

Don't count on anything of that sort happening on this side of the US, too much balkanization and reliance on the Nanny state for funds from the public treasury...in fact, I doubt anything like Prop 13 could ever happen again even in California!

After spending some time researching RE prices in the NYC tri-state, I'd have to say the local sheeple are happy to jostle for position in-line on their way to the gubermint tax shearing conveyor belt

Posted on: 2007/6/15 18:07
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Re: shore club - property tax too high?
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"So, what happens when values drop, as they invariably will do this year?"

The ratio is based on the trailing 12 months data and during that period (2006) prices in Jersey City most certainly went up. Therefore the Ratio is going down again this year (.24 to .25 are the rumored estimates). If the average sales prices in JC ever went obviously down, the Ratio would go up.

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). You won't likely see the Ratio go up in Jersey City as long as all the new construction continues, because the new condo prices have not dropped on a year over year basis even if home sales in Central Jersey have seen some price drops.

PS. Groucho you are very welcome.

Posted on: 2007/6/13 12:09
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Re: shore club - property tax too high?
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thanks for the info JCLAW

Posted on: 2007/6/13 2:45
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Re: shore club - property tax too high?
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So, what happens when values drop, as they invariably will do this year?

I know, it's a rhetorical question, but with the budget deficits I do think the question is hangin' out there in the ether...

Posted on: 2007/6/13 1:12
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Re: shore club - property tax too high?
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A bunch of accountants at the State Division of Community Affairs determine the Equilization Ratio based on comparative home sales from one year to the next. The Equilization Ratio goes down by the % amount that the average home in a municipality appreciated in value each year. The NJ-DCA generates a new annual equilization ratio for each municipality.

For example, if in Jersey City this year's ratio is .28 and home prices increased on average 10% this year, the EQ Ratio would drop to about .25 in the following year.

Posted on: 2007/6/13 0:51
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Re: shore club - property tax too high?
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So, who controls the "equilization" rate and how difficult is it for "elected" officials to play with it?

Posted on: 2007/6/13 0:30
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Re: shore club - property tax too high?
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The property tax rate is only half of the tax equation. Tax is calculated by multiplying value x rate x "equilization ratio"

The current equilization ratio for Jersey City is 28%5. Therefore the true Jersey City tax rate is .28 x .05175 = 1.44%

If you want proof that the Ratio really is .28, call the people on this page:

http://www.cityofjerseycity.com/finance.html

For further reference, read the section "Equalized Tax Rate" in the state document:

http://www.state.nj.us/dca/lgs/annual ... sary.shtml#Tax_Rate_and_L

An old but interesting article on how screwed up NJ's tax system is - you can infer yourself how this works with respect to newly valued (ie. newly built) properties such as the new condos on the waterfront is

http://www.aptcnet.com/articles/much_new_jersey.htm

Posted on: 2007/6/12 23:58
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Re: shore club - property tax too high?
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I've been looking into property tax issues in Hudson County recently and found the following link:

NJ State Property Tax rates by County

Description of Property Tax Table

Seems the official 2006 property tax rate for JC is 5.175% and for Ho-broken it's 3.434%!

These numbers do in fact add-up correctly if you research property tax assessments, which 99% of the time result in the property values being FAR under market/mortgage values...

If push came to shove and some collectivist tax & spend politicos came to power, those "tax breaks" wherein the properties are under-assessed, could change overnight

I'm just saying...

BTW, has anyone seen any air standards test results for the shore club sitting on top of the exhaust vent for the Holland Tunnel?

Posted on: 2007/6/12 23:21
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Re: shore club - property tax too high?
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Is this not all in a vacum unless you compare municipal pilot payments to a non-abatement properties total real estate tax bill; municipal, school and county taxes.

I still would like to be able to get a clear explanation how locked in PILOT payment agreements impact non-abated properties' total real estate taxes, not just the municipal portion. Unlike most municipal officeholders, I am just as concerned about school and county taxes (and services).


Quote:

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%

Posted on: 2006/11/22 16:41
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Re: shore club - property tax too high?
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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%

Posted on: 2006/11/22 10:38
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Re: shore club - property tax too high?
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Not that I'm one to re-open old discussions, but I thought there was a clause in most recent PILOTs that states that the payment will not exceed the regular RE tax that would otherwise be assessed on the property.

Also, isn't the regular RE tax rate in JC closer to 1.9% this year? I mean, taxes in Hoboken are 1.6% and I constantly hear how taxes in JC are somewhat higher than in Hoboken (not that Hobokenites are necessarily to be trusted to talk about JC).

Posted on: 2006/11/22 5:30
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Re: shore club - property tax too high?
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I know this has been beaten to death here, but I need some help understanding the abatement program here in JC.

JCLaw, where did you obtain your rates (equalization ratio & tax rate) from? Also, since the PILOT is derived from a "complicated formula," how exactly did you determine that 1.65% is "about right?"

Not attacking, just wanting to understand this better.

Thanks.

jc_i


Quote:

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.

Posted on: 2006/11/22 3:56
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Re: shore club - property tax too high?
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Guess the city really does see "tax" money even with these abatements.

quote]
sfly wrote:
...They said they have tax abatement for 20 years. But I can't tell where the abatement goes to from the number they quote.[/quote]

Posted on: 2006/11/9 15:14
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Re: shore club - property tax too high?
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i pay 12k with no views in an old building. count your blessings

Posted on: 2006/11/9 14:51
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Re: shore club - property tax too high?
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Could you explain this please. I called IRS and they do not have an answer they have to write it up.
What do you mean by
"re taxes in private rulings"

Is that real estate taxes in private rulings?

Does that refer to court cases or just judgments by the IRS

Do you have a specific part of the tax code that we can cite when asking about this?

What is the alt min tax
alternative minimum tax?

What does the condominium association ask for in the letter?


Any info you give in clarifying this will be appreciated.



Quote:

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.

Posted on: 2006/11/9 14:39
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Re: shore club - property tax too high?
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JCLaw wrote: ". . . if you are paying more than 1.46% of your apartment's real current value today, you can dispute your taxes . . ."

Is this correct? That is, are the taxes we all "should" be paying equal to 1.46% of the market value? I know I should know this, but confirming with you guys is easier that pulling out all my tax documents

Anyway, if so, I might have a call to make

Posted on: 2006/10/26 19:47
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Re: shore club - property tax too high?
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Thank you for taking the time to post some answers, but I believe and others can confirm that you have provided some mis-information.

Secaucus (later Bayonne, Hoboken and No. Bergen joined the suit) not Weehawken sued Jersey City, won a settlement and I believe precipitated 5% of PILOT's going to the county government. The total amount of taxes paid by Jersey City property owners to the county is not affected by PILOT agreements, just the amount paid by non-abatement/ non PILOT property tax payers which carry Jersey City's school and county tax burden.

The county does not set assessemts of individual property values, but does set the rate that non-abated properties pay through its approved budget and tax process. Each municipality in the county is assessed a portion of the budget raised by property taxes though calculation of the the total property values of the municipalities and then pay a pro rata share of the burden. Each city's portion of its tax to be collected and paid to the county then strikes the county tax rate for that municipality. Non-abatement properties can see their county tax rise whether the county taxes rise or not. If Jersey City's property values rise greater than other municipalities in the county as has occured recently, non-abated property owners see their county rate increase.

Same for the school taxes. Even with the huge state contribution, school taxes rise on non-abated properties.

Any increase in school or county taxes falls to non-abatement / non-PILOT properties.

Any increase in municipal taxes fall on non-abatement/ non-PILOT properties.

Your explantion on the revaluation process and impact make sense. My only comment would be that tax abated / PILOT properties would not see their taxes rise though a reval until their agreement expires which would cause an even greater municipal tax increase for "old school" owners.

Yes, the tax abatement / PILOT agreements appear to keep the municipal portion of our property taxes low (in short term) to avoid / minimize municipal tax increases and also used to avoid the municipal budget process by using "give back" contributions to various projects, institutions and activities when abatement agreements are approved.

I seriously doubt that the current process provides longterm sound fiscal management for the city.

The process as JCLAW also concurred with, needs to be opened up and reviewed by an independent auditor.

The only advantage PILOT's appear to provide Jersey City property tax payers is if they generate development that would otherwise not occur.

This discussion as come up before. Civic JC would like to see this process opened and examined. Any help would be appreciate and if you are interested, please contact me.


Quote:

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.

Posted on: 2006/10/26 19:09
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Re: shore club - property tax too high?
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"Does anyone know when the last time the city performed a city-wide property assessment?

I know there is an effort underway in Hoboken to have one done. The theory there is that the politicians that are against it are dependent upon the "old school" Hoboken vote, and that demographic would likely be forced out of Hoboken if their taxes went up. On the upside, the reassessment keeps the total tax level the same, but redistributes the tax burden across the city based on current values. While I don't want to see people kicked out on the street because they can't afford the taxes, I also don't like the idea of property owners getting a free ride on the increased valuations of their property."


The last time the city performed a city-wide re-evaluation was just before the Schundler administration, and it is what contributed to his election. YES, the current valuations, which are older than 10-years old, create a tax situation where the "old school" vote pays less than its fair share and the lions share of the tax burden is carried by principally the PILOT payers and secondly by the newer buildings which had a PILOT that expired during the last 10 years. The current government will do ANYTHING to prevent a re-evaluation, including as many new PILOT deals as it can make, wild hotel taxes, transfer taxes, giant increases in municipal fees for water, utility hookups, fines, literally anything they can get their hands on to prevent a re-evaluation. This is because they view it as political suicide, given their past experience where a re-val of the "old school" voters' properties actually prompted them to dump the entire HCDO political monopoly in favor of a Conservative Republican (In Jersey City?! - Heaven Forbid!!!).

The typical JC old-timer's property is currently paying between .66%-1.0% of its true current market value. A huge discount to new taxes (1.46%) and PILOT taxes (1.66%). A re-evaluation could cause their taxes to actually double. The city should have managed this better by increasing the tax rate annually to keep up with the improvement in values, but then of course the Old-Timers would have been angry about their annual increases.

"I keep hearing different things about what happens at the end of that 20 year period.

Right now, my new property was purchased at about $400,000. Abated taxes come to 1.75% of purchase price. After 20 years, i've heard some say it'll go to 2 % some say more.. and i don't know what to believe... it would really make a difference in how long i keep this property.. so if you can clarify, it would be much appreciated.."

At the end of the 20 year period, the assessor will determine the current market value for your property (by looking at recent sales in your building, on your block, etc), multiply that value by the current Equilization Ratio (.28) and the current Tax Rate (.0522%). So if you bought your property for $400k and your current taxes are $7,000, and it comes off its PILOT January 1st 2007, and the assessor determines that it is worth say $500k, your new taxes will be $7,300.

No one can predict what the value of your unit or the rate and ratio of taxes will be 20 years from now. I seriously doubt you will still be living in the apartment at that point.

Posted on: 2006/10/26 12:29
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Re: shore club - property tax too high?
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JCLAW:

As usual, very informative posts..

I know about abatements being "locked in" for 20 or so years (typically, some gradually increase...) but I keep hearing different things about what happens at the end of that 20 year period.

Right now, my new property was purchased at about $400,000. Abated taxes come to 1.75% of purchase price. After 20 years, i've heard some say it'll go to 2 % some say more.. and i don't know what to believe... it would really make a difference in how long i keep this property.. so if you can clarify, it would be much appreciated..

Posted on: 2006/10/26 11:45
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Re: shore club - property tax too high?
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"NNJR: If you are refering to me you are wrong. I own my apartment (850 square feet 1 bedroom), it is worth nowhere near 500K dollars and 1 pay around 7300 for taxes. So if someone says a luxery apartment worth half a million dollars is only paying 8,000 for property taxes, i think it's too low (or perhaps my taxes are waaaay too high)."

If this is really true - if you are paying more than 1.46% of your apartment's real current value today, you can dispute your taxes with the help of someone called a "tax certiorari" attorney. There are a handful of firms in NJ who specialize in this kind of work. Basically your attorney will go to the JC assessor and show him that you are paying more than the current EQ Ratio x Rate, and force the assessor to give you a personal revaluation of your home. Given the dollars involved, if there is any logic to your claim the assessor will offer you a lower tax payment in order to avoid court costs to the city.

On the other hand, if your claim is baloney, the judge will throw it out immediately so don't waste your money on an attorney. Remember that if any of your neighbors sold their apartment for anything like $500k, the assessor can claim your apartment is worth the same. FYI - Waterfront 1-bedrooms sell for $600k now.

Posted on: 2006/10/26 9:47
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Re: shore club - property tax too high?
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We need a new accountant, primarily someone with whom we can discuss these property tax issues, because the more I read, the more confused I become. Any recommendations?

Posted on: 2006/10/26 0:13
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Re: shore club - property tax too high?
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Quote:

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.

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.

Posted on: 2006/10/25 23:17
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Re: shore club - property tax too high?
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"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.

Posted on: 2006/10/25 22:11
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Re: shore club - property tax too high?
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from my understanding:

1) Newport's James Monroe condo has/had the same abatement as shore club

2) Abatement aka PILOT locks in your "tax" rate for a fixed number of years, so you pay the static amount of "tax" each year no matter what the actual property tax rate is.

3) Abatement/PILOT in newport are usually about the same or slightly more expensive than the normal property tax at the beginning and become a bit cheaper over time as normal property tax increases. In the end, the difference is small.

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.

5) There are so much confusion around abatement, as soon as people hear the word abatement, they assumed hey dont have to pay any property tax or very little (which is one reason developer like to attach tax abatement to their units), BUT in reality you actually pay MORE because they are not tax deductable.

those are my research from last year on james monroe when condo shopping, in the end i decided there is just no way to justify purchasing in newport value wise and bought in saint johns in jsq instead. Now looking back, think i made an excellent decision.

Posted on: 2006/10/25 20:03
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Re: shore club - property tax too high?
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every tax abatement agreement is diff, but shoreclub has a 1st step up after 6 years - so that locks the rate at quoted 1.65% for 6 years. last i saw posts that jc re taxes are rising. does 5.22% rate reflect that? how long do you think it'll stay at that level? if local taxes are rising at a faster rate, very soon tax-abated rate will become lower, then effective 'equalised' rate, no? if you cancel at the end of 1st year - you're loosing this protection. i would not trust jc to keep effective rates at the same level. raising the nominal rate or 'equalised rate' is always a high possibility.

Posted on: 2006/10/25 14:21
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Re: shore club - property tax too high?
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JCLAW I always enjoy your posts -- seem well informed -- but I guess I have always missed something about the whole abatement issue. I thought the point of getting an abatement was to have taxes "locked in" for 20 or more years -- am I just wrong? Are you saying that abatements don't protect the owner from tax increases over those 20 or more years?

Your point is that people with tax abatements do and will "always pay more in taxes" than owners of other "new" are totally "re-habed" places? So, all future increases will be the same for both?


Quote:

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.

Posted on: 2006/10/25 13:51
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Re: shore club - property tax too high?
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You made statements that abatements or better said PILOTs are better for the city than the developer. I asked you to explain on this old thread-

about abatements

Here you state that a condo buyer should cancel their abatement/PILOTs and pay regular taxes. Perhaps you could also explain about how this will impact the condo owner's school and county taxes.

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.

We can discuss whether the city has conflicts of interest preventing it from negiotiating the best PILOT deals later.



Quote:

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.


-edited to insert quote-

Posted on: 2006/10/25 13:50
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