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Bought a new house in October 2015. Brand new construction.. was a vacant lot full of trees before.
Ours was the third house to be built. The house to left and right of us were done before ours.

All three houses the same design.. and very similar price.
Taxes for the other two houses are ~$13000.. Mine is ~$3500

It appears that the tax assessor thinks it's still a vacant lot.. Assessed value is $120,000 for "Land" and $0 for "Improvement".
"Improvement" portion should be around $350,000.. like it is for my two neighbors.

So.. will the town folks come back some later date and ask for full tax since October 2015? Or am I banking ~$9500 a year ($822.75/month to be exact) until they reassess the property?

My google fu is lacking..

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Ooof. I'd certainly be putting at that $9500 to one side like *I* was paying it.

It goes against my nature to ask for more taxes (my assessment is wrong too, they think my house is smaller than it is, this has gone unnoticed for 8 years), but your situation is a different order of magnitude.

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I was paying it until now to the mortgage company..
they sent me a $9500 check since i was paying more for taxes than i should have.

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I would think it would catch up on the next assessment, maybe unless your neighbors notice and appeal their assessments. I'd bank the difference to be safe like ganda said, you never know.

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Put the cash away. Don't do any improvements, pull any permits and ride this as long as you can.

Eventually they will figure it out, and if they try to get cash fight them and eventually settle for a fraction.

My guess would be they don't try to recover, but it's Jersey, they always try to screw people there.

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scrouds said:   Put the cash away. Don't do any improvements, pull any permits and ride this as long as you can.

Eventually they will figure it out, and if they try to get cash fight them and eventually settle for a fraction.

My guess would be they don't try to recover, but it's Jersey, they always try to screw people there.

Money isn't the problem.. I have way more then enough to cover it.
My question was more regarding to whether I would have to pay them (i.e. whether they can claim back taxes despite their mistake)

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Take the money to Atlantic City and put it all on black.

Sincerely, EvilKKH

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No, they can't retroactively reclaim it. AFAIK.

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Oour assessor actually drives around every other year and take pictures of the house. I can see my house's picture on they county website and judge when the pic were taken by the conditions of the yard plants.

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ZenNUTS said:   Oour assessor actually drives around every other year and take pictures of the house. I can see my house's picture on they county website and judge when the pic were taken by the conditions of the yard plants.
  Google street view?

Where I live I think they do assessment every 3 or 5 years. When the property market crashed people still had to pay based on the higher assessments. You could dispute, but they made it a pain.

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AFAIK, the pics are not from one of the major site but rather taken by the assessor office. They look less "polished" then the street view pics. There was a local TV news story on it as well because we have a lot of tear-down lately, a 2000 sqft house get replaced with a MacMansion of 5000 sqft. Sometime, they also would knock on doors and ask to see the inside but one can just decline.

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KayK said:   scrouds said:   Put the cash away. Don't do any improvements, pull any permits and ride this as long as you can.

Eventually they will figure it out, and if they try to get cash fight them and eventually settle for a fraction.

My guess would be they don't try to recover, but it's Jersey, they always try to screw people there.

Money isn't the problem.. I have way more then enough to cover it.
My question was more regarding to whether I would have to pay them (i.e. whether they can claim back taxes despite their mistake)

Generally no, but it is NJ. They might try. I would just lay low and see what happens. If they come after back taxes, put up some resistance and settle or get a lawyer and fight more.

Also those taxes are crazy. And you have state income tax on top.

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Not paying taxes makes you smart!

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Kandykornhead said:   Take the money to Atlantic City and put it all on black.

Sincerely, EvilKKH

  What about "sin of omission?"
 

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kirbydog said:   
Kandykornhead said:   Take the money to Atlantic City and put it all on black.

Sincerely, EvilKKH

  What about "sin of omission?"

  I'll ask regular KKH if I see him.

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Kandykornhead said:   
kirbydog said:   
Kandykornhead said:   Take the money to Atlantic City and put it all on black.

Sincerely, EvilKKH

  What about "sin of omission?"

  I'll ask regular KKH if I see him.

  Thanks. I understand that he may be the resident expert, after all. 

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Around here, we pay property taxes in arrears.
In 2015, you pay the 2014 bill.
2016, the 2015 bill is due....

FYI... Mine is $800 a year.

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woowoo2 said:   
FYI... Mine is $800 a year.

  Do you, sir, live in a cardboard box?

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If it was in Orlando at the same valuation, downtown which I believe is a special tax district, you're looking at 9500 first year, 8500 the next year if it doesn't jump too crazy and 3% assessed value limit every year after.

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MommyOfHAndK said:   
woowoo2 said:   
FYI... Mine is $800 a year.

  Do you, sir, live in a cardboard box?

  1000 Sq. Ft. ranch on slab, garage and two other outbuildings in Southern Indiana.
The $800 includes sewer fees

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On a serious note, if you have escrow, it will be fixed there on the 2nd year - they will pay the difference they did not collect. But then your 2nd year escrow will be negative and based on year 1 plus 2, so you will add $9500 x 2 + normal taxes. I had created a spreadsheet when it happened to me. It normalizes on year 3. That is the little secret realtors and mortgage brokers don't like to talk about on new construction.

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woowoo2 said:   Around here, we pay property taxes in arrears.
In 2015, you pay the 2014 bill.
2016, the 2015 bill is due....

FYI... Mine is $800 a year.

  
My county goes by a fiscal year, which ends in August, and starts in September. The property tax payment in September is for the previous fiscal year.

School and property taxes for my 1,125 ft townhouse for the year are around $360. I only pay $13 because I qualified for a reduction program available to county homeowners who are disabled, and/or elderly (62+), and have income below a certain threshold. The information on the county website for the property is all wrong, even though it shows the permit history for a new heat-pump/AC unit, the property description still says forced hot air oil heat for heating, and nothing for cooling.

The last time the county assessment happened, there were holes in the walls, all the interior doors were damaged, the wall-to-wall carpeting over the linoleum on cement slab flooring was beat up. Bathroom Vanity and kitchen area were in very poor condition. The roof was horrible, with bad patch jobs all over. The rear stucco wall had cracks, and was a dingy, gray color. Several appliances were in poor shape. The owner paid a hefty sewer rate a few years ago, 62 yo sewer lines inside and underground lines out to the sewer main were all replaced. This used to be a Sect 8 rental property. They assessed the property as being in "poor condition".

Seller replaced roof, fixed holes in walls, and painted interior walls, replaced all interior doors with brand new ones, and removed the carpeting. 62 yo sewer & water lines from main to house were replaced 3 years ago. Seller installed a new heat pump/AC unit, new washer & dryer, new kitchen stove and new hot water heater. I replaced bathroom Vanity, ripped out ugly, cheap, damaged kitchen cabinets and counter, and replaced them, plus added an additional counter and cabinets, and installed a new DW. Installed new flooring in kitchen, LR, and hallways. Stucco wall was recently repaired and painted. Had a flower and shrub garden done out front, planted 5 rose bushes, azalea bush, bulbs and perennials. Before there was just weeds in front of the place. Lot's of improvements made, more to come.

When the county assessors ever get their way out here and look at the place, I'm sure they will upgrade their assessment (and tax rate will go up). Though they have the history of all the permits pulled, you would think they'd use that info to upgrade their assessment. In the meantime, I will be "vewwy, vewwy, qwiet" like Elmer Fudd. (Don't wake the sleeping giant, aka "tax man")

I'm not exactly going to invite them over, and willingly give them any info, though.

Don't know how things work in Jersey, I just live across the Delaware river from NJ (1 mile N of the Delaware Memorial Bridge), south of Wilmington, DE in the suburbs. It's fairly cheap to live here.

I'm with Scrouds, don't do anything, put the money aside, and adopt a "wait-and-see attitude". My understanding is that they can't change the assessment and decide to apply it to prior years, but it is NJ. If you think the assessment is too high, you can request they re-assess the property, if it's too low - say nothing. Can you look up the property records online, like we can do here in DE? That would be funny if it's stated as vacant lot, and yet there's a list of permits for contractors and builders. If so, they're as bad as DE.

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scrouds said:   
KayK said:   
scrouds said:   Put the cash away. Don't do any improvements, pull any permits and ride this as long as you can.

Eventually they will figure it out, and if they try to get cash fight them and eventually settle for a fraction.

My guess would be they don't try to recover, but it's Jersey, they always try to screw people there.

Money isn't the problem.. I have way more then enough to cover it.
My question was more regarding to whether I would have to pay them (i.e. whether they can claim back taxes despite their mistake)

Generally no, but it is NJ. They might try. I would just lay low and see what happens. If they come after back taxes, put up some resistance and settle or get a lawyer and fight more.

Also those taxes are crazy. And you have state income tax on top.

  Every taxing jurisdiction has a right to correct and assess additional ad valorem taxes from prior periods due to a mistake in unreported or unassessed improvements to a property.   Whether a specific taxing jurisdiction has a law that bars collection from said assessment, which would be highly unlikely, is another matter.   It is far more likely, should a related law exist - though still rare - is that it sets forth a time period in which the taxing jurisdiction must correct any omissions.  This is because those that draft the laws would know that you, the taxpayer, would use the principle of estoppel (estoppel by laches) as defense so that potential damages are highly likely to be limited to a certain time frame by the courts anyway.

All that said, the other advice is sound:  have the funds available should the tax assessor discover their mistake and choose to go after prior underassessed periods due to the omission.   Unless you are willing to spend the time and $ to fight the assessor -- and you certainly could win depending on relevant laws for your domicile -- then attempt to negotiate a settlement of, at the least, a waiver (full or partial) of the penalties and interest and, depending on how many years they attempt to go back, maybe an elimination of some of the periods under dispute (e.g., no more than 3 years would, generally, be considered reasonable).  In my experience, the vast majority of tax authorities are willing to negotiate a settlement than end up in the courts.

rated:
sorry dp -- bad wifi connection here in Aungban, Myanmar

rated:
woowoo2 said:   
MommyOfHAndK said:   
woowoo2 said:   
FYI... Mine is $800 a year.

  Do you, sir, live in a cardboard box?

  1000 Sq. Ft. ranch on slab, garage and two other outbuildings in Southern Indiana.
The $800 includes sewer fees

  I experience both ends of the spectrum -- 1,900 sq ft house in NE TX on .5 acre is ~$3,500/yr.  Meanwhile, 1200 sq ft house and 4 outbuildings on 125 acres  (40-50% forested) in AL is ~$1,000/yr!

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wdsaltman95 said:   sorry dp -- bad wifi connection here in Aungban, Myanmar
  
and you win this week's Most Remote FWOTer Award!

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wdsaltman95 said:   scrouds said:   
KayK said:   
scrouds said:   Put the cash away. Don't do any improvements, pull any permits and ride this as long as you can.

Eventually they will figure it out, and if they try to get cash fight them and eventually settle for a fraction.

My guess would be they don't try to recover, but it's Jersey, they always try to screw people there.

Money isn't the problem.. I have way more then enough to cover it.
My question was more regarding to whether I would have to pay them (i.e. whether they can claim back taxes despite their mistake)

Generally no, but it is NJ. They might try. I would just lay low and see what happens. If they come after back taxes, put up some resistance and settle or get a lawyer and fight more.

Also those taxes are crazy. And you have state income tax on top.

  Every taxing jurisdiction has a right to correct and assess additional ad valorem taxes from prior periods due to a mistake in unreported or unassessed improvements to a property.   Whether a specific taxing jurisdiction has a law that bars collection from said assessment, which would be highly unlikely, is another matter.   It is far more likely, should a related law exist - though still rare - is that it sets forth a time period in which the taxing jurisdiction must correct any omissions.  This is because those that draft the laws would know that you, the taxpayer, would use the principle of estoppel (estoppel by laches) as defense so that potential damages are highly likely to be limited to a certain time frame by the courts anyway.

All that said, the other advice is sound:  have the funds available should the tax assessor discover their mistake and choose to go after prior underassessed periods due to the omission.   Unless you are willing to spend the time and $ to fight the assessor -- and you certainly could win depending on relevant laws for your domicile -- then attempt to negotiate a settlement of, at the least, a waiver (full or partial) of the penalties and interest and, depending on how many years they attempt to go back, maybe an elimination of some of the periods under dispute (e.g., no more than 3 years would, generally, be considered reasonable).  In my experience, the vast majority of tax authorities are willing to negotiate a settlement than end up in the courts.


We can argue the finer points if you like. Since I'm likely to buy at some point in Florida, I've read up a bit. My understanding is that here, they wouldn't be able to go backwards on assessments for a persons homestead. They can only raise property taxes on homesteads on Jan 1, and only within the limits set forth in the constitution of the state. You'd have a very good argument to enjoin any retroactive changes. I've also read that Florida has one of the most protective laws in the nation.

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KayK said:   Bought a new house in October 2015. Brand new construction.. was a vacant lot full of trees before.
Ours was the third house to be built. The house to left and right of us were done before ours.

All three houses the same design.. and very similar price.
Taxes for the other two houses are ~$13000.. Mine is ~$3500

It appears that the tax assessor thinks it's still a vacant lot.. Assessed value is $120,000 for "Land" and $0 for "Improvement".
"Improvement" portion should be around $350,000.. like it is for my two neighbors.

So.. will the town folks come back some later date and ask for full tax since October 2015? Or am I banking ~$9500 a year ($822.75/month to be exact) until they reassess the property?

My google fu is lacking..


Holy fark batman, $13k in property tax for a house worth less than half a mil??? :O (I forgot you're in jersey).

But I don't care how the local govt works there but that's some major injustice man. That's the amount my aunt pays for her house here but that's only becuz her place is worth close to 2mil (sweet prop 13). Are you guys on something similar to Mello Roos (people in Irvine, Ca cries over this all the time).

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bravebiffy said:   Holy fark batman, $13k in property tax for a house worth less than half a mil??? :O (I forgot you're in jersey).

But I don't care how the local govt works there but that's some major injustice man. That's the amount my aunt pays for her house here but that's only becuz her place is worth close to 2mil (sweet prop 13). Are you guys on something similar to Mello Roos (people in Irvine, Ca cries over this all the time).
Had to google Mello Roos..

Nope.. tax is regular tax for everyone.. 2.804% of the house price.

rated:
bravebiffy said:   
KayK said:   Bought a new house in October 2015. Brand new construction.. was a vacant lot full of trees before.
Ours was the third house to be built. The house to left and right of us were done before ours.

All three houses the same design.. and very similar price.
Taxes for the other two houses are ~$13000.. Mine is ~$3500

It appears that the tax assessor thinks it's still a vacant lot.. Assessed value is $120,000 for "Land" and $0 for "Improvement".
"Improvement" portion should be around $350,000.. like it is for my two neighbors.

So.. will the town folks come back some later date and ask for full tax since October 2015? Or am I banking ~$9500 a year ($822.75/month to be exact) until they reassess the property?

My google fu is lacking..


Holy fark batman, $13k in property tax for a house worth less than half a mil??? :O (I forgot you're in jersey).

But I don't care how the local govt works there but that's some major injustice man. That's the amount my aunt pays for her house here but that's only becuz her place is worth close to 2mil (sweet prop 13). Are you guys on something similar to Mello Roos (people in Irvine, Ca cries over this all the time).
 

  People living in relatively new areas have taxes based on infrastructure that doesn't need a lot of maintenance... yet.

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UPDATE!

Got a tax bill bill last week for the reassessed house value..

Went to the borough main office yesterday and wrote them a check for $10704.XX

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KayK said:   UPDATE!

Got a tax bill bill last week for the reassessed house value..

Went to the borough main office yesterday and wrote them a check for $10704.XX

Was that for 2016 taxes or for next year? I think previously I assumed they bill in advance but that's not a given either.

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scrouds said:   KayK said:   UPDATE!

Got a tax bill bill last week for the reassessed house value..

Went to the borough main office yesterday and wrote them a check for $10704.XX

Was that for 2016 taxes or for next year? I think previously I assumed they bill in advance but that's not a given either.
2015 October 1 till 2016 November 1.. so 13 months.
2017 1st quarter taxes aren't due until 2/1/2017

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