Short Sale -- Property tax? (sales, housing, price, value)

[boozereddy]

I recently saw a short sale property in Jersey city,NJ. It is listed 150K below the 2007 value. I am planning to put an offer on this property. I need clarifications regarding the following items.
- Will the property tax I have to pay in 2010 be adjusted to the new sale price or will it still be based on old home assessment
- What are my chances of getting the tax reduced if I have the property re-assessed.

Appreciate your replies.

[boozereddy]

bump^^^^

[middle-aged mom]

You may challenge your assessment. The assessed value may or may not change due to the nature of the sale or other factors.

Generally speaking:

Values of most homes in the U.S. have declined.

Municipal revenue derived from sales taxes has also declined.

Cost of schools ( the primary line item on your tax bill) and municipal services/ debt servicing are constants.

Property taxes are the result of multiplying the assessed value X a factor to generate sufficient revenue to support schools and municipal services/debt servicing.

When assessed values decline, the multiplying factor ( or whatever it is called in your local area) increases.

Some municipalities are being forced to make serious budget cuts. Detroit is an example, whereby it became necessary to cut the Police Force by 25% to balance the budget. Those remaining middle class areas, within Detroit, hire out private security patrols. I am aware of some areas, within Queens that have done likewise, for years.

If you are successful reducing your tax bill, be aware that that shortfall will need to be made up by other homeowners unless the municipality is forced to make drastic changes within their budgets.

[chet everett]

The details of how property taxes are determined vary from state to state and even township to township. For specifics on the procedure in your area there is no substitute for meeting with the governmental officials face-to-face.

That said I know from direct experience in Illinois that the the assessor specifically WILL NOT fully apply "distressed sales" as they do "normal arm's length" sales. The reason is simple -- doing this would result in the wholesale collapse of assessed valuations and would require the millage rate to be sky high to collect the taxes needed to fund schools, police, fire, sewers, roads, mosquito abatement and the couple of dozen other line items on Illinois property tax bills.

The fact is that the assessor's role is to do their best to see that the standards of valuation are based on supportable data so that things are fair and above board. In almost every case where there is a clear procedure to point out errors and serious discrepancies in well run counties the end result is a system that does reflect a fairly uniform valuation. If that is the case where your property is located I would focus less on "getting a bargain" and more on being sure that valuation is inline with reality.

Good Luck!

[shellytc]

this is real specific to NJ. Some jurisdictions are more open to assesments changes, some not so much. You may try asking on the NJ board and see if anyone has had any luck with your locality.

Good Luck.

shelly

[boozereddy]

Thanks all for replies.

[Norsky1]

I was in the same situation (taxable market value is 120k over our purchase price) and I called the assessor this week to get the estimated taxes for 2010 and the value went down 5k but taxes went up ($16 for the year), but that doesn't make much sense. They said we will see a decrease in the 2011 taxes though.

The problem is, the county/township/city still needs thier money to function which i understand, but why does every government division need to spend exactly what they are bringing in (i suppose usually more than they bring in actually)? They should really leave room for emergencies like maybe a recession and housing bust.. Normal people think like that at least.