Real Estate Taxes Flashcards
Ad valorem tax
a tax levied according to value; generally used to refer to real estate tax
aka general real estate tax
assessed valuation
the valuation placed upon property as a basis for taxation
equalization factor
the tool used to bring all property to a uniform level of assessment.
assessed value of each property in a specific area are multiplied by equalization factor, and the tax rate is applied to the equalized assessment
full-value assessment
estimate based on probable sales price
almost impossible to attain full-value assessment
mill
one tenth of one cent. a tax rate of 52 mills = $0.052 tax for each dollar of assessed valuation
ratable
taxable property
redemption period
a period of time established by state law during which a property owner has the right to redeem his or her real estate from a tax sale by paying the sales price, interest, and costs even after a foreclosure sale
tax revaluation
a program undertaken by a municipality to appraise all real property within the taxing district according to its full and fair value
special assessment
special taxes that require property owners to pay for improvements that benefit the real estate they own.
(i.e. streets, alleys, street lighting, curbs, etc.)
tax foreclosure
seizing of property for unpaid taxes
tax lien
a lien imposed by law upon a property to secure the payment of taxes.
tax liens and assessments take priority over ALL OTHER LIENS.
tax sale
a court-ordered sale of real property to raise money to cover delinquent taxes
what are some examples of governmental municipalities that can tax real estate?
- states
- counties
- cities, towns, townships, boroughs, and villages
- school districts
- park districts, forest preservers, recreation districts
- water, sanitary, and drainage districts
What are the exemptions from ad valorem/general real estate tax?
- homeowners aged 65+ and/or disabled, may take annual deductions of up to $250 from property taxes
- qualified war veterans and unmarried surviving spouses may take up to $250 from property taxes
- fully disabled war veterans and unmarried surviving spouses can receive full property tax exemption
- “Senior Freeze”: homeowners 65+ can get reimbursement if property tax increases
- rebates available to homeowners and tenants who pay property taxes and whose gross income does not exceed a certain amount
Farmland Reassessment Act
permits farmland and woodland acres that are actively devoted to an agricultural or horticultural use to be assessed at their productivity value
most properties used for religious, charitable, and other non-profit purposes are ________
totally exempt from property taxes
true tax figure
amount of tax a new owner would pay rather than a reduced amount paid by the current owner
appealing taxes
taxpayers can appeal taxes if they feel assessment is unfair
between Jan 1-April 15 appeals must be filed to your county with a local tax assessor
equalization rates
used by the State division of Taxation to achieve uniformity among tax districts, as not every district assesses at market value
why is the equalization issue important to local governments?
state funding of programs is based on assessed value of local real estate.
how are tax rates determined within a tax district?
- begin with budget (county, school, district, etc)
- appropriation
- impose tax levy
- arrive at tax rate dividing money needed for coming fiscal year by the total assessments of all real estate located within the jurisdiction of the taxing body
what is the tax rate in New Jersey?
$1 per $100 value
tax sale certificate
a certificate given to purchaser at a tax sale when they are not entitled to occupy the property and does not receive title
when do taxes on a real property become a lien?
January 1, taxes due February 1 and paid quarterly on the first of May, August, and November
If redemption period passes and homeowners have not redeemed the property,________
the holder of the tax sale certificate may obtain clear title by legal process of foreclosure any time within 20 years
Exclusion from capital gains tax of up to $500,000 profit on the sale of a principal residence is available for
married taxpayers who file jointly
single filers get up to $250,000
capital gain
profit from the sale of property
exclusion from capital gain tax may be reused as often as ________
every two years if the home sellers have owned and occupied the property as a principal residence for at least two of the five years before the sale
who is eligible to make penalty free withdrawals from the individual retirement fund?
first time homebuyers, max withdrawal for down payment is $10,000
