Three towns in the area have undergone the arduous effort of having a tax re-assessment. Residential real estate taxes are used to fund each town’s operating budget, most of which goes towards funding the school system.
When home values fluctuate (like after the housing crash in 2008) this usually precipitates the need to re-evaluate the homes to better reflect their most current “full and fair” values and therefore the taxes homeowners will pay in coming years.
Because the real estate market in 3 towns along the Midtown Direct train line are experiencing vigorous home sale price increases, over the last 4 years, they decided to have re-assessments. They have been completed in Millburn/Short Hills, Maplewood and South Orange and the new assessments will take effect on January 1, 2017. Because taxes are paid quarterly, it will not be reflected in the homeowner’s tax bill until the third quarter of 2017.
All homeowners should have received a letter with the new tax rate and the current value of their home. Not everyone’s taxes will increase (although the majority will) and not all will increase by the same amount.
Here’s an example – let’s say you bought your house many years ago. Since then the neighborhood prices have risen by 15% and the new next door neighbor paid $100,000 more for the same sized home. The tax burden on the new home owner would be much higher than the owner who has resided there for many years. The re-assessment would bring up the value of the older home owner to more equally distribute the burden.
What to Do About Your Tax Re-Assessment?
Let’s say you are not in agreement with the revised valuation for your home. What can you do? You have three options:
II. If the appeal is not successful, you may want to consider re-financing your home. How does this help with your tax re-assessment? If you have owned your home for more than a few years, you have likely accumulated equity. At the same time, interest rates are at a historical low. So, by refinancing, you could conceivably end up paying less or equal than what you pay now with the new assessment in place. I work with 2 great lenders who can speak to you about your options. Call me now for assistance on re-financing at (917) 327-0701.
III. If the first two options don’t work for you, perhaps you may want to consider selling your home and moving to one that has less taxes. Remember, taxes only go up and you may feel like you are no longer getting the benefits you once did from your real estate taxes (i.e. no kids in school etc.). The good news is that home prices in Millburn, Short Hills, South Orange and Maplewood are extremely strong, so you would be selling at the top. We are getting ready for the spring market now, so call me now for assistance to get your home sold at the highest possible price, in the shortest amount of time (917) 327-0701.