Towns making money off of tax foreclosures?

DS News reports on a Michigan case where a property was foreclosed upon by the town for unpaid taxes, and then sold at a "profit."  A comment caught our eye, [our comments in brackets.]

A study from Quicken Loans revealed that as of 2018, 21% of Michigan homeowners were unaware their property was behind on property taxes, and another 61% of renters in tax-delinquent properties were unaware of the home’s tax status.  ["Unaware" sounds ludicrous to us.  Could a homeowner be that foolish?]

Here's the full story written by Seth Welborn.

Tax Foreclosures Under Scrutiny

The Michigan Supreme Court is being urged by Pacific Legal Foundation to halt a state law which allows counties to “profit” from the sale of foreclosed properties, after a home in Oakland County was sold for $24,500 after being foreclosed on for $8.41 in unpaid taxes.

“It is akin to stealing,” said Pacific Legal Foundation attorney Larry Salzman, in Bridge Magazine. “The government shouldn’t be taking more than is owed to them to cure the tax deficiency. I understand states are under [budget] pressure but government should not use citizens  as a bank teller or an ATM machine.”

According to Bridge Magazine, county tax foreclosure is a common practice in Michigan, and counties have foreclosed on over 177,000 properties in the state since 2012. Oakland County, the state’s second largest in population, foreclosed on over 5,500 properties between 2012 and 2017 according to state records, but 65% of county foreclosures took place in Wayne County (Detroit).

A study from Quicken Loans revealed that as of 2018, 21% of Michigan homeowners were unaware their property was behind on property taxes, and another 61% of renters in tax-delinquent properties were unaware of the home’s tax status. However, property tax foreclosures in Detroit are at a 14-year low. In 2018, 2,920 properties faced property tax foreclosure auction, down from 6,052 in 2017, and far below the peak of 15,000 in 2015.

“As Detroit comes back, we need to do everything we can to make sure those who stayed in our city through good times and bad are able to stay in their homes,” Mayor Mike Duggan told Quicken Loans. “We are seeing real progress in tax foreclosure reductions that impact all of our neighborhoods, and through programs like Neighbor to Neighbor, we will continue this important work in close partnership with the community.”

Although outreach programs have helped improve Detroit's tax foreclosure issues, the city still faces other foreclosure-related challenges. According to GOBankingRates and data from Zillow, 34.4% of homes are currently underwater, and the median home value at the Detroit-Warren-Dearborn metro-area level is $161,300, far below the national median of $226,300. GOBankingRates puts Detroit second on its list of U.S. cities most likely to enter a housing crisis.

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Farmland taxes in New Jersey

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help! 

New Jersey's Farmland Tax Assessment saves some people a lot of money.

Many NJ taxpayers are up in arms over the reduced taxes paid by some they consider wealthy or connected who happen to benefit from the reduction in real estate taxes when property is classified as farmland.

What's it all about?  NJMoneyhelp.com looks at the issue in this post:

Q. What is New Jersey’s classification for a “farm” for real estate tax purposes? For example, if I start keeping bees on my property, would that convert my property into a farm? I already have red oak trees on my property, and because red oaks produce acorns – which are edible – does my property constitute a “farm?”
— Wanna-be farmer

A. We’re guessing you asked that question after it was revealed that Kevin Corbett, the head of NJ Transit, paid only $19.42 in taxes for five acres of his Mendham Township property that’s assessed as farmland. He paid $20,609 in taxes in 2018 for the rest of the property, less than one acre, where his home stands.

That’s a big difference.

There are several requirements before your property can be assessed as a farm.

First, it must be at least five acres, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Holmdel.

The second requirement is that the property must be actively devoted to agricultural or horticultural use for at least the two successive years immediately before the tax year for which farmland assessment is requested, he said.

“Land is considered to be in agricultural use when devoted to the production for sale of plants or animals useful to man – excluding dogs – or when the land qualifies under a federal soil conservation program that makes payments to the owner,” Becourtney said. “Land is in horticultural use when it is devoted to the production for sale of fruits, vegetables, nursery, floral, ornamental or greenhouse products, or when the land qualifies under a federal soil conservation program that makes payments to the owner.”

Land is actively devoted to agricultural use when the amount of the gross sales of agricultural products produced on such land, together with soil conservation program payments, and fees received for breeding, raising, or grazing livestock have averaged at least $1,000 per year during the two-year period immediately preceding the tax year at issue; or there is clear evidence of anticipated yearly gross sales, and the other sources noted, of at least $1,000 within a reasonable period, he said.

An application for farmland assessment must generally be filed on or before August 1 of the year before the tax year for which such farmland valuation is sought. The assessor can grant an extension of time, up to and including September 1, if it appears to the director’s satisfaction that the taxpayer’s failure to file the application form by the August 1 due date was due to the illness of the taxpayer or to the death of the taxpayer or a member of the taxpayer’s immediate family, he said.

“In your situation, assuming you meet the acreage test, you would need to reach the state’s sales threshold from selling acorns and honey that presumably the bees would be producing in order to obtain the reduced farmland assessment for your real estate taxes,” Becourtney said.

Read the post here.

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New Jersey Senior Freeze program helps with your tax bill.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

From New Jersey Money Help-

A question about NJ's Senior Freeze Program

Q. Has the property tax freeze been increased to incomes of $90,000?— Senior

A. You’re talking about the Senior Freeze program.

According to the website of the New Jersey Department of Treasury, Division of Taxation: “The Senior Freeze Program reimburses eligible senior citizens and disabled persons for property tax or mobile home park site fee increases on their principal residence. To qualify, you must meet ALL the eligibility requirements for each year from the base year (the year in which you became eligible for the senior freeze) through the application year (the current application year is 2018).”

These eligibility requirements are based on age/disability, residency, home ownership, property taxes payment history and income limits.

In this year’s budget, funding for the Senior Freeze program is increasing by $18 million in fiscal year 2020 for a total of $219.7 million, Taxation said.

The increase was because the budget removed language that capped income eligibility at $70,000, raising it back to $89,013, which will allow more people to apply, Taxation said.

Keep in mind that if your status is as a married/civil union couple and you lived in the same household, you must combine your incomes for the year and be below the income limits, said Deva Panambur, a certified financial planner with Sarsi, LLC in West New York. and adjunct professor of personal finance at Montclair State University.

The Division of Taxation has an online questionnaire to help you check your eligibility.

Email your questions to Ask@NJMoneyHelp.com.

This story was originally published on July 23, 2019.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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NJ Governor Murphy recommends changes to bill allowing prepaid property taxes - a report from Vested Land Services LLC

It's not title insurance but NJ Biz, a report on New Jersey taxes from Vested Land Services LLC, the consumer's title insurance agency- 

Murphy recommends changes to bill allowing prepaid property taxes

Gov. Phil Murphy has recommended certain technical changes to a proposed bill that would permit New Jersey taxpayers to make dedicated prepayments toward anticipated property taxes.

Murphy took this action in response to President Donald Trump’s signing into law the Tax Cuts and Jobs Act, which limits a person's maximum state and local property tax (SALT) deductions to $10,000.

Murphy wants to eliminate possible confusion in Bill 3382by explicitly “clarifying that taxpayers may indeed prepay their property taxes, regardless of whether the municipality had issued the quarterly tax bills prior to submission of the prepayment. This clarifying language is retroactive to July 1, 2017, and applies to any taxpayer who attempted to prepay a third or fourth quarter property tax installment for tax year 2018 in calendar year 2017.”

New Jersey residents pay among the highest property taxes in the nation.

Read the full article at - http://www.njbiz.com/article/20180406/NJBIZ01/180409875/murphy-recommends-changes-to-bill-allowing-prepaid-property-taxes

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

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E-mail sflatow AT vested.com

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New Jersey property owners abused by tax abatements

Two columns in the Asbury Park Press this past week highlight the use of real estate tax abatements to attract development.  Both columns point out that ordinary tax payers take a beating when abatements are granted because school taxes are impacted when abatements are granted.

The first column is Sunday’s editorial.

"A report issued last week by the state Comptroller's Office spotlighted the practice of municipalities from Hoboken to Millville giving out tax breaks involving "hundreds of millions of dollars" on property worth billions of dollars statewide.”

 “It also recommended a number of steps the state should take to ensure the tax breaks are benefiting the average citizen, not developers and their political friends.”

School districts are hurt the most when abatements are given since the property being developed does not pay school taxes.  Thus, in the words of the editorial,

 “[W]hen a developer gets a huge tax break, it does not mean a municipality's tax demands are correspondingly reduced. Other property taxpayers make up the difference. That's not fair.”

Columnist Bob Ingle also goes after tax abatements.  Picking up the editorial’s theme, he writes,

“Abatements can make the situation worse for the already over-burdened property tax payers. Consider: A municipality gives an abatement to a widget factory which hires 30 people. The town arranges for payments in lieu of taxes. School districts receive no part of those payments, but the 30 workers bring an additional 90 kids to the school district, which has to expand at additional costs to the property tax payers and state aid from Trenton.”

How about this case?

“In South Jersey, Gloucester Township in a six-month period handed out three short-term abatements to Wawa stories expanding to Super Wawas. The three are within two to four miles of each other. Why should property tax payers have to underwrite the expansion of Wawa stores? The company is big and wealthy and probably would have expanded the stores anyway.”

Well, this does seem unfair.  What do you think?

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