Does a refinance trigger a tax assessment?

[Ian Livaich]

Hello all,

I am currently negotiating with a bank on a REO over my first property. It is a triplex in New Jersey. This would be a BRRR deal. My question is this -- does a refinance trigger a tax assessment by the town?

The property next door is identical but is a single family home with two less bedrooms.  After it was flipped and sold last year, its assessed value shot up $90,000, causing an increase of $4,000 annual taxes.  So, I am assuming that a sale of a property triggers a new tax assessment by the town.  Please let me know if that is an accurate assumption.

So, I then thought if a refinance triggers a tax assessment as well, our potential property, which would likely appraise at the same price as the house next door, causing a tax increase at a similar level and destroying cash flow and ROI post refi. If this is not the case for the next few years, the cash flow and ROI make this a home run deal. I understand that the town will eventually re-assess.

Two follow up questions

(1) If the town does not re-assess on a refi, does it just assess based on its pre-determined schedule for assessing properties?

(2) Does pulling permits for rehab trigger a tax assessment?  The property mainly needs roof and HVAC work.

Thanks for your input,

Ian