OT - Property Taxes

[rivals1982]

I wanted the board's thoughts on what is unreasonable for property taxes.

I am looking to buy a new house (new construction) for $1.8 million in Tenafly, NJ. The property tax is about $34,000 a year.

Generally speaking, I can pay the property taxes, but I feel like that is a bit high and I am concerned about it going up over time. Is this too much in property taxes and is that a reason to choose a different place?

Frankly, I don't even know what the property taxes cover, I guess most of it goes to pay for schools, police and pensions, but I don't even know what would cost so much considering that the town doesn't have a pool, fancy parks, high traffic, etc.

Curious what the board's thoughts are considering there is a broad spectrum of fellow NJ residents here.

 

[Jtung230]

I know people that think 4K in taxes is high. It's very subjective and a personal choice.

 

[OTBOTOR]

It will go up over time, but maybe not as much as older properties with stale assessed value data (assuming those assessments are updated sometime over the term of ownership).

Is it too much? Depends. Do you have kids who will go to school? How long do you plan to live there?

I think the big things to think about are (a) can I comfortably afford the mortgage, tax, etc.? (B) Is the sum of those payments a fair value relative to comps in the same or comparable towns? And (c) Am I likely to make some money back when I sell?

 

[BLewis1968]

Agree with both earlier comments.
What's reasonable to you may not be reasonable to others. My questions would be 1) what the tax rate in the town is, 2) what the house has been assessed at for tax purposes. Then, if you choose to buy, I'd say if you have the time and interest - and at those numbers, I'd find both - you could obviously dig up a bunch of comps and go in and fight your taxes. I've done that several times, and had success every time. Now, I'll grant, it's a little easier when you live in a more transient town where comps are ubiquitous. It might be harder in a town where people aren't buying and selling as frequently.
Just my 2cents

 

[RBNY87]

Does anyone really think 34K is not too high? Of course it is ridiculous. It is all a balancing test. Some people are willing to pay more for RE taxes if it means you would be sending your kids to public schools where if you lived somewhere else you would send to private schools.

 

[T2Kplus10]

I wanted the board's thoughts on what is unreasonable for property taxes.

I am looking to buy a new house (new construction) for $1.8 million in Tenafly, NJ. The property tax is about $34,000 a year.

Generally speaking, I can pay the property taxes, but I feel like that is a bit high and I am concerned about it going up over time. Is this too much in property taxes and is that a reason to choose a different place?

Frankly, I don't even know what the property taxes cover, I guess most of it goes to pay for schools, police and pensions, but I don't even know what would cost so much considering that the town doesn't have a pool, fancy parks, high traffic, etc.

Curious what the board's thoughts are considering there is a broad spectrum of fellow NJ residents here.

For a nice town with a good school district, those property taxes for a $1.8 million house are pretty typical. And yes, the taxes will go up on average from 2-3% a year (assuming the cap law stays in place), but as pointed out above, you would be less susceptible to a re-val like older properties are.

 

[BLewis1968]

Does anyone really think 34K is not too high? Of course it is ridiculous. It is all a balancing test. Some people are willing to pay more for RE taxes if it means you would be sending your kids to public schools where if you lived somewhere else you would send to private schools.

Well, it's relative. I'd bet a $1.8 million home in some of the Essex county burbs (Millburn, Glen Ridge, Upper Montclair) would see taxes even higher than that.

That said, I see the average in Tenafly was $19k last year.
http://nj1015.com/the-10-towns-with-the-highest-and-lowest-taxes-in-all-of-nj/

 

[198hamilton]

If you're looking for advice, I suggest that you don't use your 34th post to tell us you're buying a house for 1.8 million. Nobody gives a **** and you look like a putz. Speaking of putzes, if you need to broadcast such info something tells me your little member is 1.8 inches, fully erect of course.

 

[AshSaturday]

I've argued before-and "won". An attorney helps but you can do yourself. There are certain days of the year (deadlines) to do this-usually by May 1st.

What you have to do (just like when buying a house) is to look for comparable properties or "comps". I lived in Bridgewater so I had to go to Somerest County Offices n Somerville (chaged over the years) and find the given office with old sales for your area ***

Also in addition or in lieu? of the above you can ask a local realtor (give them time) to print out recent sales (your tax assessor will pull his own data and fight you)-they want your future business and you're going to need to use sales no longer than 6 months if possible).

What you need to do is compare each sales to the other (they should be close to y\our house). **Optimally you wil find a sale, say, that differs in only one feature from yor given house. Say your house has a garage and your comp has no garage. ***Since that's the only feature that differs that's the value of your garage.

**You can't really compare similar from town as tax rates per town (calculated in mils or cents per thousand) differ from town to town.. **A town such as Bernardsville may have whopping overall taxes but a great tax rate as they have lots of taxable properties/businesses (ratables). In Somerset county Bernardsville and Bridgewater have the best tax rate (most bang for the buck). I had a 5 bedroom, 2.5 bath, .99 acre, 2121 sq ft house and was paying $8,300 (maybe even in the $7,400 range). My buddes on this board were paying in the $6,500 range off Stelton for a small older one floor "ranch" (perfect for them-10 minutes from all of work, The RAC and the Stadium and passed down from Dad and Mom).

Having lost all eventually in and after a forclosure process (pretty much due to theft by sister) I hgjhly recommend moving to a "cheaper" town as you get older (one real estate trend).

A bit time comsuminmg but often worth it.

 

[Scarlet1984]

If you're looking for advice, I suggest that you don't use your 34th post to tell us you're buying a house for 1.8 million. Nobody gives a **** and you look like a putz. Speaking of putzes, if you need to broadcast such info something tells me your little member is 1.8 inches, fully erect of course.

Obviously, it was a silly post.

That said, your response was also silly.

 

[newell138]

 

[RU206]

To answer your question of what property taxes cover it falls into 3 buckets and you can ask your town for a break down. Each town is different but my town is this:
55% goes to schools. (Salaries, building maintenance , subsidized breakfast and lunches, buses, computers, books, sports, and anything else that goes into running a school).
20% goes to the county. In my case Middlesex. This is for county colleges, parks, roads, and what ever else the county does with the money

25% goes to town hall to pay for cops, fire, sanitation , paving and plowing roads, cop cars, fire trucks, garbage trucks, etc.

 

[Jtung230]

Does anyone really think 34K is not too high? Of course it is ridiculous. It is all a balancing test. Some people are willing to pay more for RE taxes if it means you would be sending your kids to public schools where if you lived somewhere else you would send to private schools.

You would be surprised at how many people send their kids to private school in high tax towns.

 

[patk89]

Doesn't seem excessive given the price you are paying for the house. Most people in north jersey, Westchester, and LI are paying higher rates. Consider yourself fortunate and, yes, you should budget for these taxes to increase at a higher rate than inflation to pay for public services.

 

[RUBubba]

My house in central NJ (with an famous deli known for its milfs), is assessed for less than a 1/3 of your house and my taxes are less than a 1/3 of yours.

 

[bowlgoal]

God bless for affording something like that. You buy a house like that I'm Monmouth county you are buying a palace with taxes probably like $20- $23k. But north jersey I'm sure has better schools.

 

[Rokodesh]

not sure if this is a troll post. Nobody buying a 2 million dollar house is concerned about a 10-15k dollar difference in property tax

 

[bowlgoal]

not sure if this is a troll post. Nobody buying a 2 million dollar house is concerned about a 10-15k dollar difference in property tax

I would say many out there buy houses they can't afford. It's not only the taxes but the costs of running and up keeping the home and keeping up with the neighbors. I don't really know what you get in tenalfy for $1.8 million? I live in a smaller home in Manalapan and still can't believe the costs you don't even think about and fluctuating bills.

I guess it's all relative to your earnings?

 

[miketd1]

 

[Scarlet_Scourge]

$34,000 a year is still high by anyone's standards.

That is $2,833.33 a month...yikes..

 

[PSU_Nut_rivals17625]

For a nice town with a good school district, those property taxes for a $1.8 million house are pretty typical. And yes, the taxes will go up on average from 2-3% a year (assuming the cap law stays in place), but as pointed out above, you would be less susceptible to a re-val like older properties are.

Does NJ allow for a referendum to go above the cap?

 

[RUschool]

It's the average property tax for the $1,800,000-1,900,000 price in Tenafly. Quite a few homes in the 3-2 million range.

 

[RUskoolie]

Solid troll. Dude can buy a house for almost 2m but doesn't understand what property taxes cover?

 

[rurichdog]

The B1G Build Fund silently weeps at $34,000 property taxes

 

[T2Kplus10]

Does NJ allow for a referendum to go above the cap?

Yes, you can exceed the cap if voters approve it via a referendum. But remember, the "2%" cap has several exemptions than can push tax increases above 2% without going down that road.

 

[Jersey Boys]

 

[RUSONIC]

You could have bought Ecuador for $1.8 and had no taxes.

 

[RUChoppin]

Despite the clear trollishness of the post....

That's actually a low rate for Tenafly. The Tenafly tax rate is 2.206... which means it'd be around $39K for a $1.8M house. So $34K is a bit low for the township... of course, you may be paying $1.8M on a house valued at $1.54M, in which case you overpaid about 8 years worth of taxes.

Elsewhere in Bergen County, the taxes on the same house value in Ridgefield Park Boro would be about $60K and in Alpine Boro would be about $11K.

 

[rivals1982]

Thanks for the many helpful response. I wasn't trying to make this sound like a troll post by any means, just had a question that I thought the board would be knowledgeable on.

Going to be my second time buying a property and really haven't been keeping up to date with market trends or property taxes. My first property that I bought was for $360,000, it had $10,000 property taxes in Hudson county... so my feeling was that $34,000 on a $1.8 mil house was not too bad.

To answer some of the questions, I have two young kids so I am mostly moving because I heard the public schools are good, but I have also considered sending them to private school - not sure yet.

 

[rivals1982]

Also the reason why I am price sensitive is because I will basically be buying the house with 20% down and taking on a huge mortgage. The mortgage will take up about 40% of my take-home pay so I am trying to keep other costs down to the extent possible and trying to gauge how much these other costs will go up over time.

 

[Shoeless Joe #1]

I live in Montgomery- have great Public Schools, and pay around 15K

 

[Jtung230]

Thanks for the many helpful response. I wasn't trying to make this sound like a troll post by any means, just had a question that I thought the board would be knowledgeable on.

Going to be my second time buying a property and really haven't been keeping up to date with market trends or property taxes. My first property that I bought was for $360,000, it had $10,000 property taxes in Hudson county... so my feeling was that $34,000 on a $1.8 mil house was not too bad.

To answer some of the questions, I have two young kids so I am mostly moving because I heard the public schools are good, but I have also considered sending them to private school - not sure yet.

if you only have 2 kids and the only reason you are moving is because of schools, you should just consider private school rout.

 

[IMORTGAGENJ]

Also the reason why I am price sensitive is because I will basically be buying the house with 20% down and taking on a huge mortgage. The mortgage will take up about 40% of my take-home pay so I am trying to keep other costs down to the extent possible and trying to gauge how much these other costs will go up over time.

I was in the mortgage business for over 25 years. If you are spending 40% of your take home pay you are in way over your head. I have seen a lot of people in the same situation with nice houses and no furniture. I doubt any lender would lend you the money you need based upon that number.

 

[Purple-Ed]

You could have bought Ecuador for $1.8 and had no taxes.

And had money left over to buy Brazil.

 

[rutgersal_rivals139582]

34K on a 1.8 million dollar house is actually quite good. You'd be paying a lot more if the house were in surrounding towns, as someone else pointed out.

 

[Knight Shift]

And taxes on a house at that price, would be about $20,000 in many Monmouth County towns.

 

[mildone_rivals]

Solid troll. Dude can buy a house for almost 2m but doesn't understand what property taxes cover?

Maybe he was read-ended by NJ Transit not long ago.

 

[mildone_rivals]

Also the reason why I am price sensitive is because I will basically be buying the house with 20% down and taking on a huge mortgage. The mortgage will take up about 40% of my take-home pay so I am trying to keep other costs down to the extent possible and trying to gauge how much these other costs will go up over time.

Now that you've told us everything about your current financial situation, why not also stop by the Social Security number thread. [winking]

 

[Retired711]

I pay one-third of those taxes on a house that is worth, at best, one-sixth of the OP's. I would also say that 40% of one's income is a lot to pay for housing.

 

[RU in IM]

I was in the mortgage business for over 25 years. If you are spending 40% of your take home pay you are in way over your head. I have seen a lot of people in the same situation with nice houses and no furniture. I doubt any lender would lend you the money you need based upon that number.

I have been in the banking business for 30 years and don't necessarily agree. 40% of take home pay would be less than 30% of gross pay which would fall under the old conservative ratio of 28% mortgage 36% total debt, which is always calculated off of gross income.

Also, with 20% down, and a 3.5% 30 year loan and the real estate taxes results in a $10,000 monthly P,I and T payment. If that's only 40% of take home then the person would have $15,000 or 60% of additional take home pay a month for other expenses. I think that's enough to live on.

Now if the 40% payment is just for P&I and not taxes, then the borrower's take home would be about 15,000 a month, given a $6,500 P&I payment. Then the borrower would have slightly more than an additional $5,000 a month in take home pay for other expenses. That might be cutting it close, depending on your lifestyle.