Real Estate Taxes

Question 1

Ad valorem tax

Answer 1

a tax levied according to value; generally used to refer to real estate tax

aka general real estate tax

Question 2

assessed valuation

Answer 2

the valuation placed upon property as a basis for taxation

Question 3

equalization factor

Answer 3

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

Question 4

full-value assessment

Answer 4

estimate based on probable sales price

almost impossible to attain full-value assessment

Question 5

mill

Answer 5

one tenth of one cent. a tax rate of 52 mills = $0.052 tax for each dollar of assessed valuation

Question 6

ratable

Answer 6

taxable property

Question 7

redemption period

Answer 7

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

Question 8

tax revaluation

Answer 8

a program undertaken by a municipality to appraise all real property within the taxing district according to its full and fair value

Question 9

special assessment

Answer 9

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.)

Question 10

tax foreclosure

Answer 10

seizing of property for unpaid taxes

Question 11

tax lien

Answer 11

a lien imposed by law upon a property to secure the payment of taxes.

tax liens and assessments take priority over ALL OTHER LIENS.

Question 12

tax sale

Answer 12

a court-ordered sale of real property to raise money to cover delinquent taxes

Question 13

what are some examples of governmental municipalities that can tax real estate?

Answer 13

1. states
2. counties
3. cities, towns, townships, boroughs, and villages
4. school districts
5. park districts, forest preservers, recreation districts
6. water, sanitary, and drainage districts

Question 14

What are the exemptions from ad valorem/general real estate tax?

Answer 14

1. homeowners aged 65+ and/or disabled, may take annual deductions of up to $250 from property taxes
2. qualified war veterans and unmarried surviving spouses may take up to $250 from property taxes
3. fully disabled war veterans and unmarried surviving spouses can receive full property tax exemption
4. “Senior Freeze”: homeowners 65+ can get reimbursement if property tax increases
5. rebates available to homeowners and tenants who pay property taxes and whose gross income does not exceed a certain amount

Question 15

Farmland Reassessment Act

Answer 15

permits farmland and woodland acres that are actively devoted to an agricultural or horticultural use to be assessed at their productivity value

Question 16

most properties used for religious, charitable, and other non-profit purposes are ________

Answer 16

totally exempt from property taxes

Question 17

true tax figure

Answer 17

amount of tax a new owner would pay rather than a reduced amount paid by the current owner

Question 18

appealing taxes

Answer 18

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

Question 19

equalization rates

Answer 19

used by the State division of Taxation to achieve uniformity among tax districts, as not every district assesses at market value

Question 20

why is the equalization issue important to local governments?

Answer 20

state funding of programs is based on assessed value of local real estate.

Question 21

how are tax rates determined within a tax district?

Answer 21

1. begin with budget (county, school, district, etc)
2. appropriation
3. impose tax levy
4. 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

Question 22

what is the tax rate in New Jersey?

Answer 22

$1 per $100 value

Question 23

tax sale certificate

Answer 23

a certificate given to purchaser at a tax sale when they are not entitled to occupy the property and does not receive title

Question 24

when do taxes on a real property become a lien?

Answer 24

January 1, taxes due February 1 and paid quarterly on the first of May, August, and November

Question 25

If redemption period passes and homeowners have not redeemed the property,________

Answer 25

the holder of the tax sale certificate may obtain clear title by legal process of foreclosure any time within 20 years

Question 26

Exclusion from capital gains tax of up to $500,000 profit on the sale of a principal residence is available for

Answer 26

married taxpayers who file jointly
single filers get up to $250,000

Question 27

capital gain

Answer 27

profit from the sale of property

Question 28

exclusion from capital gain tax may be reused as often as ________

Answer 28

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

Question 29

who is eligible to make penalty free withdrawals from the individual retirement fund?

Answer 29

first time homebuyers, max withdrawal for down payment is $10,000