Best of luck! When we were searching in NJ the formulas were very complicated. We saw the formula sheets for real estate taxes in different areas and the best anyone could tell us was our taxes would be "around" $25 - $30K, and we'd find out exactly how much after we closed. Huh!? These were nothing much houses in the $500 - $750K range in several different municipalities.

Wow, that's a lot of money(to me, at least). I now live in a 1500 sf house and want to eventually trade up, but if this is what I'm facing, I may either be stuck here forever, or have to get out of Dodge.

My house is now assesed at $149,000 and my taxes are $6500/year. My house is WORTH $350-$400,000. I'm really in for it if they reassess at some point.

My simplified question is... Does the town use your purchase price at all to assess the tax value or do they do their own thing? For example, you buy for $400,000. Can they/do they come in and say "Your house is worth $315,000" even though you paid $400,000?

I always see RE listings with "Low taxes- $5800!!" That's great, but when I buy it, won't that change? If so, why are you advertising that great low tax rate?

I'm just trying to do some homework before I get caught in an overpriced house.

Wher I used to live, and also, where I live now, houses are reassessed periodically. The only time that the tax is based on a purchase price is when the house is first built.

As far as what one would pay on a house worth $x : It also depends on how much commercial property is in the area. In my native Long Island area, we had a Long Island power authority plant in our town. They paid a good amount of the property taxes for the town (Huntington), and taxes on comparable houses in the adjoining town (Smithtown) would be Double what our's were!

Some towns adjust the assessment when houses are sold and some don't. The ones that don't tend to adjust at least a little for increases in the market value. Your REA should know what the local practice is. Taxes will also go up if you take out a building permit to do something that will increase the value of the house.

School taxes, which are often the biggest piece, will also go up as school budgets go up. The only thing that seems to hold them all in check is voter dissatisfaction and the threat of being voted out of office.

The property tax in EVERY house I have ever bought went up proportionately to the price paid. I bought a home last year and the tax bill I will be getting in November will be based on THAT price, NOT what the previous owner paid. It's something to consider when you are thinking of "trading up." Up means tax-wise as well!! It's probably why a lot of people stay put and decide to add on. Sure you can make a profit on the sale of a home bought years ago, but if you're staying in the same area, you're gonna pay a ton more in property tax for the privilege.

It varies across the country. There simply is no one correct answer.

Here, our property taxes have remained the same as the previous owner's. However, 2007 is our year & we will receive the new assessments in November. Then, in CT...the assessed value represents 70% of market value.

You'll need to determine the tax structure for each town you are considering.

/t

I agree with Triciae, each state is different. In NY, your taxes shouldnt change when you purchase a house (unless its new construction) because that is called "spot assessing"and its illegal. If they reasses your house, they have to reassess the whole town.

For example, you buy for $400,000. Can they/do they come in and say "Your house is worth $315,000" even though you paid $400,000?

No, when its time for a reassessment in your area, they have your market value. Your taxes will be based on what you paid as that is the most current market value. You can call the town you are looking to buy in and get their tax formula. If your assessment is $150,000, and the taxes are $3000, paying $300,000 for a house doesnt mean your taxes will double to $6000. You need the town tax forumla to know exactly what they will be when the town does their reassessing.

I would have to say it depends on where you go.

I'm down in Burlington County, originally from Union / Somerset, we haven't been reassessed since hubby bought the house 25 years ago. Don't get me wrong, taxes have gone up for everyone but not by reassessing.

Case in point, they've been "talking" of reassessing since I've been down here (1993). It was going to be on resales from what I remember, but nothing that I've actually heard happening.

My dad sold his house in Roselle; he was assessed with the wrong sized lot (1/2 smaller by width) when they went to computers. I don't doubt that town fixed it for the new owners. Why would that town tax them on a smaller lot when it was larger which is more $$$? The house he bought was about $6,000 in taxes. It is on a lot that used to belong to the house behind him. A builder bought the house / property then subdivided. My dad was pretty ticked when he heard that the house behind him, which sold for not much less then his new house (prices jumped after he signed his contract) but the owner said the taxes didn't change. Had my dad lived (diagnosed with cancer a week before closing), we would have fought it I'm sure.

Two factors make up my tax bill: 1) the assessed value, 2) the year's tax rate for each taxing body (county, town, schools, library, whatever). If residential is the only base, the rate will be higher than if commercial properties carry some of the load.

In my county they assess annually. This is a superior way to finance government because it reflects current values. We have lived in Cook Co. which assesses a third of the county each year because it is so large.

Our assessments are made on a township level, based on a valuation of all similar properties within a neighborhood(size, exterior construction material, etc. and land value). When a house sells, that price goes into the mix, lifting median assessments for the whole neighborhood. (I am not thrilled by the teardowns happening around me -- small ranches on large lots being replaced by BIG homes mean higher assessment on my house.)

The only disadvantge I see to you as a buyer would be if you wanted to protest your assessment. How could you justify a complaint if you've just paid more than the assessed valuation? I always protested our assessment in Cook Co. because there were properties nearly identical to mine that were under-assessed; they had to reduce mine.

Wow you New Jerseyites get slammed with taxes! Here in Florida (Palm Beach County), where there is no income tax, people are upset when they get hit with a 2.1% rate on real-estate. For a home with an assessment of $400k, which would be a 2000sqft home on a .15 acre lot, your taxes would be around $8400k. Our appraisers do not set your appraised value based on the sales price of the house. They use an averaging method for the neighborhood. Normally the appraised value is about 15-20% under the real value. Of course that's changing with the drops going on in home prices here.

It sounds like Floridians also have the same issue as you guys when it comes to being locked into a home. We have Save Our Homes which locks in your assessed value on homesteaded property that cannot go up more then 3% in a year. When we moved in 2004 we saw our tax bill triple. This is a big part of the problem with real-estate in Florida.

We moved to the 'middle of nowhere' because we wanted to get away from the congestion of the city and because we realized we could never retire with a real estate tax bill of $8,000. We now have a brand new 1750 sq. ft. house on 58 acres with a guest house next door. It is perfect for us and our taxes are under $1000.

Our kids and g-kids wished we lived closer, but we really wanted to retire to a quiet, crime free area. We found paradise.

Watch out for schools. They take the biggest bite out of our RE taxes (60%).

I can't complain about our taxes after seeing what some of you in the NE are paying. Ours are less than 1% of what we'd sell for -- not "market value" as determined by the assessor, which is 40% lower than what we'd actually get. And we get wonderful services. I have no complaints except perhaps for schools, which, being directed by "volunteer boards" are more into academe than fiscal matters. Unfortunately, there is little other than residential here; last town had a shopping mall within our school district that paid about half the bill!

Thank you all! A lot to think about, but it doesn't seem as bad as I thought.

I just can't believe we're almost priced out of NJ if we want to 'trade up' to a bigger than 1500 sf house. I DO want a better school system for my kids. We could afford to purchase the house, but the taxes will eventually get us. I can't "move up" out of my $400,000 little house. damn... I'm actually looking for a 350,000 range and will still get clobberred. Relatively speaking of course. I know it's on an individual basis.

thanks again! A lot of insight.

You might think to look down here. It's why most North Jersey people come down here. I couldn't believe when I saw people I graduated with down here.

Roselvr, that's exactly where I'm looking. I really like the great schools down there. We're specifically wanting to look in the Cherry Hill vicinity and surrounding towns. Marlton maybe. I'm NewJersey? on citydata. (hi)

Mullica hill has some nice houses which we liked but those are the taxes I used in the example above which we thought may be too high. 4% is a little too much I think. It is also a little too far away from the Cherry Hill location. We want a very short commute to where we end up working.