Tax re-valuation may be complicated

7/17/2009:

Still want that reval?

Now that Hoboken Property Taxes are evidently on the way down, end election season is over – many of the über-angry residents who were complaining about the unexpected tax bills have either settled down, “accepted it,” or found other ways to fill their free time.

hoboken-property-tax-revaluation

One of the big election issues was a Tax Revaluation that many residents wanted – because one hasn’t been performed in Hoboken since the 80’s. The proponents of an “immediate reval” cited that it was “unfair” that property owners some neighborhoods were paying “significantly less” than others with similarly valued properties. Many believed it was as easy as “counting and updating an excel spreadsheet” – while others understood the sheer complexity and COST of a citywide property revaluation.

To give you an example of the headaches involved with a reval – take a look at what’s happening over in Bergenfield, NJ

There are ALWAYS losers in a reval

Bergenfield had performed a reval in 2005 – which left residents in some parts of the town with “unfair” valuations – doubling – even tripling their property values – and resulting in 30 percent tax increases (and NOT because of a budget debacle.)

Now, they plan on performing yet another “re-revaluation” – that will cost city taxpayers almost another $600,000 in fees. Many residents feel that it’s the right thing to do, and will lower – and even reduce taxes to pre-2005 levels. But not without a price…

Commercial Property Owners now holding the bag

“But commercial property owners who could face up to a median 32 percent tax hike are not as enthused. Downtown merchants who own their buildings said they are especially worried about how to cope with the increase in a stalled economy. Some residents say the second assessment wasn’t worth the money spent on the appraisal and the resulting appeals, especially because of the impact on commercial properties. “The new reval never should have been done,” said resident Diana Flagg. “Our commercial district has been falling apart for years, and this will be just another nail in their coffin.”

I can only imagine of commercial business in Hoboken were hit in the same fashion – prices go up, residents spend less – more closed shops – a complete downward spiral.

Do you think it’s safe to assume that when Hoboken property gets revalued – that there will be a massive finger-pointing “not fair – nyeah” bitchfest? Any way it can be achieved where “everyone wins?”

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29 Comments on "Tax re-valuation may be complicated"

matt_72
Member

sorry – meant to say TWENTY YEARS AGO – no coffee yet

matt_72
Member

You are somewhat restricted if you pay artificially high taxes b/c the dump next door has an assessment from 1980 & that assessment is at a massive discount to the market value but you got assessed at a substantially higher value that reflects the true market value so you pay disproportionately more in taxes.

I don’t think you get it – in Hoboken taxes have nothing to do w/ market value. THAT IS THE PROBLEM. Market value should be how assessments are done. If a property is a dump, the market value will reflect that. If it was just renovated, it will reflect that. If the market is inflated, all prices will reflect that, if it is in the tank, all prices will reflect that. The market corrects for the imbalances over time and it doesn’t discriminate based on in what decade the building was built/renovated/assessed.

IndieCom
Member
there are properties that were assessed last in 1987 (not 1980 as you stated….please get your facts correct), but you are aware that there is an equalization rate, aren’t you? I actually think YOU DON’T GET IT. You are SOOOO sure that everyone who has lived here a long time is not paying high taxes compared to the people who bought at the top of the market. You are SOOOO sure that the buildings with lower taxes (lower relative to Hoboken’s taxes), SHOULD BE assessed higher, but you really don’t know what you are talking about. I’d venture to guess you’ve never been in a longtime residents apartment, condo or multi family building, so why do you think you know what you are talking about? It probably has never occurred to you that the taxes that are always pointed to on 411 are all associated with politically connected individuals, not every single one of them, of course, but do you really think our recently retired tax assessor wasn’t playin’ fast and loose with his assessments? Give me a break. In response to matt_72 who said: You are somewhat restricted if you pay artificially high taxes b/c the dump next door has an assessment from 1980 & that assessment is at a massive discount to the market value but you got assessed at a substantially higher value that reflects the true market value so you pay disproportionately more in taxes. I don’t think you get it – in Hoboken taxes have… Read more »
matt_72
Member

You roughly have it. Y is a constant in most communities, x is usually proportional to the market value of the property if they reassess every few years. Rent control makes things a little funky, I think they have to adjust for that b/c those units are probably valued differently depending on the rental income generated by the particular unit in question (which makes sense if you value them on a DCF basis).

hobokenj
Member
hobokenj

Some one like estevens may be better to explain this but a reval may not necessarily have huge savings for people. It is my understanding that the city need to raise Y amount in property taxes. Right now they use a formula x * assessed value on each property. With the grand sum of all that tax equaling the Y value. Once a reval is done they change the formula so that x is a smaller number so as property values move up when you multiply by the smaller x you are paying the same taxes to get to the Y value. Those with new construction wont see there property values move all that much up or down since the should be close to the value they were assessed at. So in the end taxes will be about the same as the town will use a formula to get to the figure they need.

Anyone know more about how the calculations would work?

The real crime is the overspending in city hall.

briank
Member
briank

It is borderline criminal that a reval has not been done. My condo’s implied value (calculated using assessments and rates) is nearly $1M. I couldn’t sell it for $700K right now. Either way, when an unrenovated row house fetches $800-900K and they pay only $5000/yr in taxes while I pay $15K, something is not right or fair. I am tired of listening to the cries of taxing out the seniors when they are sitting on near million dollar bought and paid for homes. Convert the asset to cash and rent somewhere. I’d love to live in a mansion in Greenwich, CT, but just because I can’t afford it doesn’t mean I should make everyone else pay for me to live there.

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