Why would property tax be reported as much lower on the listing?

Question

Hi guys and gals!I'm new to the NJ area and looking to get back into RE buy and hold, current AD coastie. I have a vet realtor who's like minded on the buy and hold strategy. Question that I haven't gotten a lot of clear answers on.

Currently looking at a place in Hudson county selling around $500k 4 unit. The property taxes are listed on the listing at just under $7k for 2017 land $75k additions $25k. What is going on here exactly??? I've done the calculations and even appraising it at $12k (2.234% average property tax for Hudson) still puts me cash flowing but still. I'm just curious. I'm definitely brand new to the property tax world as I was a landlord in Florida where property taxes weren't an issues. Thanks for the help!

Mark

Jessica Zolotorofe · Answer

There's an equalization ratio in every town. What town is it?

Jessica Zolotorofe · Answer

Hi @Mark Franks, so Union City has an equalization ratio of 36.69%. So the assessments you see on the tax card or online are only 36.69% of what they believe your property value is.

Peter Tverdov · Answer

The majority of towns in NJ do not update their assessed values every year. Instead, they update the calculation to get to what your property taxes will be. Some towns are going on 20-30 years between assessments. Don't sweat it if you see a very low tax assessed value for your property but keep in mind they are likely to get re-assessed in the future so you're wearing some property tax risk.

We see it all the time in the towns we manage property for in Central NJ.

Mark F. · Answer

Makes sense. Thank you Diana.

Diana Tian · Answer

`@Mark Franks new sale won't change the house' assessed value. The assessed value will change only in situations like you have house improvements, the city does a revaluation, you appeal taxes, and etc.

Mark F. · Answer

I checked and going back to 2012 it's listed as 100k assessed. So I assume going forward I should be okay? Again the numbers still work. Even if they came in and assessed it at 550k or something I'm still alright.

Mark F. · Answer

Thank you Terrance, Jessica and Larry for that info. Great stuff!

Larry S. · Answer

Hi @Mark Franks. I don't trust the listed tax amount.  Not saying they are purposely listed incorrectly, but I always verify here:

https://tax1.co.monmouth.nj.us/cgi-bin/prc6.cgi?menu=index&ms_user=monm&passwd=data&district=1301&mode=11

Terence Eng · Answer

Sometimes the tax listed on listings may not be accurate also, I've seen some differences between them (ie zillow, redfin, realtor.com..etc).  You can view the properties actual tax for a given year via this site for Hudson County.  http://www.hudsoncountynj.org/search-tax-records/

Mark F. · Answer

Great thanks for that info. I had no idea.

Why would property tax be reported as much lower on the listing?

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