The New Jersey Homeowner’s Guide to Tax Credits

new jersey homeowner

New Jersey homeowners are burdened with the highest property tax rates in the US. It is no wonder that every year, NJ homeowners look for ways to reduce their tax bill. The good news is there are a lot of ways to find tax relief in New Jersey; and we’ve compiled a list of four strategies for you right here on the Veitengruber Law blog.

Every single NJ homeowner has the right to challenge the taxable value of their home. While you cannot change the state property tax rate, you can change the number your home is valued at and therefore lower the cost of property taxes you pay. An NJ home valued at $250,000 and taxed at 2.4% (the NJ average) would create an annual property tax of $6,000. The homeowners of this property can appeal the taxable value of the home. If the appeals board agrees and lowers the value to $200,000, their new property tax bill would be $4,800. Even a minor adjustment can save NJ homeowners thousands of dollars over the course of their lifetime.

You can determine the taxable value of your home by visiting the NJ Department of the Treasury website and searching your county’s property records. Your individual county might have further information about how they assess property value, schedules, and assessor records. Once you know the taxable value of your home, you can appeal your property tax assessment. This process will be different from county to county. You will need to prove that your home has a lower value than what it was assessed at, either because of size or condition.

While every NJ homeowner is eligible for the appeals process, the following property tax relief programs require the homeowner to meet specific prerequisites.

1. Basic Homestead Rebate or Credit

If you make less than $250,000 a year, you might be entitled to a rebate or credit. This return is based on the first $10,000 in property taxes paid the previous year. The percentage of your property tax you are entitled to receive back in a credit or rebate depends on your annual income. The lower your income, the higher your percentage.

2. Senior Benefits

If you are 65 or older, you could qualify for an additional rebate or credit under the homestead rebate. This would again depend on your annual income. Additional tax benefits are available if you are a senior receiving Social Security, if you have lived in NJ for 10+ years, if you have lived in your current home for 3+ years, if you have been consistent with paying your property taxes, and if you meet specific income limitations.

3. Blind or Disabled People

NJ homeowners who are blind or otherwise disabled can qualify for similar benefits available to seniors. In NJ, you have to prove you are “permanently and totally disabled,” meaning that your disability is not temporary and you can prove a significant, determinable physical or mental impairment.

4. Veterans Benefits

In New Jersey, the home of a totally disabled veteran is exempt from property tax. A veteran who actively served in a time of war is eligible for a tax credit of $250. The spouse of a veteran is also eligible for these benefits. This November, NJ voters may decide on a bill that would extend this $250 credit to all NJ veterans, regardless of whether or not they served in active duty.

If you think you qualify for any of these or other tax breaks in NJ, it can be worthwhile to consider seeking legal help to reduce your NJ property tax. Veitengruber Law can help you work through the sometimes complicated appeals process to lower your annual property tax bill.

How the New Jersey Senior Freeze is Making a Difference

Property taxes are defined as taxes that are collected by the local jurisdiction in which a real property is located; the amount of property taxes any homeowner owes is based on the assessed value of the home(s) they own multiplied by the current tax rate in their local jurisdiction. New Jersey’s average property tax rate is one of the highest in the United States.

Owning a home in the Garden State has a lot of benefits, and those of us who are living and raising a family here wouldn’t dream of doing it anywhere else. We may have to grit our teeth every time the quarterly tax bill makes its appearance, but pay it we do. Life in New Jersey is worth it – offering tight-knit neighborhoods, reputable public schools, and, of course, the Jersey Shore! However, as NJ homeowners reach retirement age, many have begun struggling to keep their homes, in many cases because they’ve fallen behind on their property taxes.

As New Jersey’s real estate market continues to take hits, lawmakers are now taking steps to help struggling seniors so they don’t have to leave the state in order to afford to own a home. The Property Tax Reimbursement Plan, commonly called the “Senior Freeze,” is one of the programs that is making a real difference.

Under the Senior Freeze, or the PTRP, New Jersey seniors who meet a list of requirements will be eligible for reimbursement of the cumulative increase in their property taxes since the first year they became eligible, which is called the base year.

In order to qualify for property tax increase reimbursement under the Senior Freeze program, New Jersey seniors:

  • Must have lived in New Jersey for at least ten consecutive years – either renting or owning their own home
  • Have resided in the home they currently own for a minimum of the last three consecutive years
  • Should be at least age 65 or have a spouse who is at least 65 year of age – ALTERNATIVELY – those who do not meet the age requirement but are receiving Federal SSDI (disability) benefit payments can also qualify
  • Must meet specific income requirements

The year in which New Jersey seniors are able to meet all of the above eligibility requirements is considered their base year. The base year is essentially the year in which their property taxes will be “frozen,” so to speak. Any increase in their NJ property taxes that they have paid out since the base year will be repaid to them.

Ex: Ruth turned 65 in the year 2010. She has lived in and owned her current New Jersey home with her husband for 20 years, and she also met all of the additional requirements in 2010. Ruth will be reimbursed using this formula: The property tax amount she paid in 2017 (current year) minus the amount she paid in property taxes in her base year (2010). The difference equals her reimbursement amount.

Every year forward, Ruth’s property taxes will remain frozen at the amount she paid in her base year of 2010. Combined with assistance from the Homestead Benefit Program, New Jersey senior citizens have a better chance at maintaining their standard of living into retirement, and they can continue to enjoy the wonderful Garden State for many years to come.

 

 

 

 

Property Tax Appeals After a Natural Disaster

Photo courtesy of Raquel Baranow

With all of the property damage caused by Hurricane Sandy, most people in affected areas are still working hard to bring their homes back to their former beauty. It may seem hard to believe for those who are somewhat removed from the situation, but many New Jersey towns unfortunately have quite a few residents whose houses and properties were essentially ruined. Now it’s been nearly a month since Sandy blew through town. Homeowner’s or Flood Insurance claims have been filed, damage has been mostly cleaned up, and rebuilding is starting to take shape.

Homeowners in towns like Asbury Park, Point Pleasant, Manasquan, Avon, Allenhurst, and so many others along the New Jersey coastline who have suffered property damage may be coming to some harsh financial realities. Although helpful, insurance just isn’t going to pay for all of the bills that are starting to pile up. As homeowners and business owners reach this conclusion, they are left scratching their heads about what else can be done.

Many home mortgage lenders are seeing an influx in applications for loan adjustments, and many are responding with forebearance plans. In a forebearance plan, lenders agree not to force borrowers into foreclosure as long as they bring their loan payments current by the end of the term of the plan. In addition to loan modifications, New Jersey residents have another avenue to travel down if their home, business, building, or property of any type sustained damage due to Hurricane Sandy.

New Jersey law, specifically statute N.J.S.A. 54:4-35.1, states: “When any parcel of real property contains any building or other structure which has been destroyed, consumed by fire, demolished, or altered in such a way that its value has materially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casualty, which depreciation of value occurred after October first in any year and before January first of the following year, the assessor shall, upon notice thereof being given to him by the property owner prior to January tenth of said year, and after examination and inquiry, determine the value of such parcel of real property as of said January first, and assess the same according to such value.”

What that means in layman’s terms is that property taxes are based on the value of a piece of land and the building(s) on that land. If any of those buildings were damaged so much that their market value has decreased, the homeowner or business owner is entitled to owe less in property taxes. In the case of Hurricane Sandy, commercial and residential property owners must make a request to have their tax assessor revalue their property by January 9, 2013.

It is possible that you may be required to attend a public hearing at your County Board of Taxation, and in this case it is highly recommended that you retain the services of an attorney and be sure that he or she is in attendance with you at the hearing.  Look for an attorney who specializes in real property or real estate, and ensure that he or she is licensed to practice law in New Jersey. All businesses aside from sole proprietorships are required to be represented by an attorney at the public hearing level.