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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Do you know anything about the State of New Jerseys 2 % cap

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Do you know anything about the State of New Jersey's 2 % cap on Real estate taxes increase each year, one town after an revaluation increased theirs by 34%, without a vote by the town
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and I'm sorry to hear about your issue. Unfortunately, the 2% tax cap is on the millage rates imposed by municipalities, and not the property valuations. Therefore, a municipality can revalue property and get around the 2% cap. So, provided that the tax rate did not increase by more than 2%, the town is compliant. However, one would have something to raise a stink with the state Attorney General's office if the revaluation brought the house values over fair market value. For example, if you own a home that is worth $100,000 but the tax office assesses it for $200,000 there's a big problem. If that's going on, you can file a complaint with the New Jersey State Attorney General's office for them to investigate and take action.

CLICK HERE to read more about this tax.

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Customer: replied 4 years ago.

Please explain what millage rates are also there isn't anyway that a building for a restaurant/bar is worth more in 2012 than in 1999, especially with the market dropping in the northeast by 50%.


 


Thanks Ken

Customer: replied 4 years ago.

Please explain what millage rates are also there isn't anyway that a building for a restaurant/bar is worth more in 2012 than in 1999, especially with the market dropping in the northeast by 50%. There is also something reported in the Star Ledger last wednesday, editorial section, that the towns cannot raise taxes more than 2% without putiing it to0 a Vote to the citizens of each town


 


Thanks Ken

There are two components of tax - the assessed value of the property and the tax rate. The tax rate is also known as the millage rate as well.

For example, if you had a property assessed at $100,000 and property tax was 10%, you would pay property tax of $10,000 per year.

The New Jersey State Law basically says you can't change the 10% portion to greater than 12% without a vote.

There's nothing in the law that says you cannot take the $100,000 property and assess the value at $200,000, which would double the amount of property tax paid - but would not be because of a rate increase.

Raising the value of the property is a creative way your town is getting around the state's law. If your property is worth less than the taxing authority says it is worth, you can fight the appraisal with your taxing board and get them to lower your assessed value to the fair market value.

If they refuse, you could file a complaint with the state Attorney General.

Please let me know if you need further clarifications.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

Customer: replied 4 years ago.

Thank You, XXXXX XXXXX please direct me to the Actual Law as my client needs this to go to the Town, where can I go to get the actual details of this Property tax law and how they calculate the 2% cap.


 


Thanks Ken

Thank you for your follow up. CLICK HERE for the bill.

The first step for your client would be to fight the assessment. Most attorneys charge a nominal fee for this, as it's quite common in New Jersey due to the cap. They could do it on their own, too if they wanted to.

Thanks

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

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