Sales Tax on New Jersey Short Term Rentals

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!

Sales Tax on New Jersey Short Term Rentals

New Jersey landlords, especially those down the Jersey Shore, are impacted by a sales tax on short term rentals.  New Jersey uses taxes to boost revenues, and the short term rental tax is just another tool in the taxman's box.

Here are two links you might (or might not) find helpful in understand which categories of owners are affected by the tax.

The first is from the CPA firm of Chris Whalen in Red Bank, New Jersey.  The second is from the State of New Jersey.

Tax Memo from Chris Whalen, CPA

New Jersey Tax Bulletin TB-81R.

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

1500 Allaire Avenue, Suite 101
Ocean, NJ 07712

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

E-mail sflatow@vested.com

@vestedland

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New Jersey Exit Tax is not really an exit tax. Think of it as a tax prepayment.

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!
The below topic is something we deal with every day.  If you are a homebuyer, trust us to get it right.

**  From the blog of Untracht Early LLC.  A New Jersey based CPA firm.**

The New Jersey "Exit Tax" is not really an exit tax.

If you’ve recently been talking about moving around a former New Jersey resident, it’s likely you’ve heard something about the “exit tax” you’ll be required to pay as you move out of the state. As your conversation continues, you’ll likely hear stories of the price residents have paid to move, and how this forced them to reconsider moving. But what is this cost, and what do these stories all mean?

In actuality, the New Jersey “Exit Tax”, as it’s referred to, has been likened more to urban legend than fact by CPAs. The law requires sellers of New Jersey homes to pay the state tax in advance of moving, of either 8.97% of the profit on the sale of their home or 2% of the total selling price – whichever is higher.

The objective of the pre-payment is that no New Jersey residents can move out of the state without first paying taxes on the income from the sale of their home. At the end of the day, the New Jersey “Exit Tax” is simply misunderstood as an additional or special tax, instead of the pre-payment of potential income tax due that it really is.

The resulting question for many New Jersey taxpayers is, what happens if they don’t incur a profit on the sale of their home? The good news is that homeowners that incur a loss on the sale of their residence, and those who also pre-paid the tax before leaving the state, will be refunded the pre-payment when filing their NJ State Income Taxes.

Here’s some other information that may be pertinent to taxpayers who are concerned by the New Jersey “Exit Tax” estimated payment:

• Homeowners may be exempt under Internal Revenue Code Section 121, which makes gains on the sale of a home exempt from capital gains if the homeowner has used the home as their primary residence for 24 of the last 60 months (for married couples filing jointly, only one spouse must meet this requirement)
  • The exemption for these gains is up to $250,000 for single homeowners, $500,000 for those homeowners who are married filing jointly
    • Taxpayers are automatically disqualified if the home was acquired through a like-kind exchange or if they’re subject to expatriate tax
    • Taxpayers may qualify for a partial exclusion of gain if the reason for the sale of the home was a change in workplace location, a health issue, or an unforeseeable event
• The pre-payment for the selling of the residence should be recorded on the GIT/REP form

As time goes on, tax professionals hope that the New Jersey “Exit Tax” misnomer goes the way of other urban legends and becomes a footnote in taxpayers’ memories.

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

1500 Allaire Avenue, Suite 101
Ocean, NJ 07712

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

E-mail sflatow@vested.com

@vestedland

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Own a beachfront property in New Jersey? Read this.

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!

This is from our friend Larry Bell, Esq. at CATIC.

Public Trust Doctrine Is Now The Law In New Jersey

By the law of nature these things are common to all mankind – the air, running water, the sea, and consequently the shores of the sea. No one, therefore, is forbidden to approach the seashore, provided that he respects habitations, monuments, and the buildings, which are not, like the sea, subject only to the law of nations. From Book II of the Institutes of Justinian, Roman Emperor Justinian, circa 500 AD.

Dating back to Roman law, public rights to the seashore gave fishermen and travelers by sea unfettered access to dry land. Those public rights were maintained through the English Common Law and brought to America by the settlers of the original 13 colonies. A common law right, public access to the shore has developed in New Jersey through several court decisions, the first of which was the 1821 case of Arnold v. Mundy, 6 N.J.L. 1, where an owner of land adjoining the Raritan River claimed exclusive fishing rights to tidal oyster beds abutting his property. In that decision, the Court held that “[Common Property includes] ‘the air, the running water, the sea, the fish, and the wild beasts. [These are] things in which a sort of transient usufructuary possession only, can be had ....’” Unlike other public property, it was “ ... to be held, protected, and regulated for the common use and benefit.” Several other decisions and numerous regulations would follow as reviewed by the NJ Department of Environmental Protection.

On May 3, New Jersey Governor Phil Murphy made the Public Trust Doctrine the law of the state when he signed P.L. 2019, Chapter 81 into law with an effective date of July 1, 2019. It was a long time coming, but NJ now has a law that codifies the Public Trust Doctrine, intended to ensure public access to beaches and tidal areas, and promote, protect and safeguard public access rights. The new law affects both the 127 miles of NJ oceanfront beaches as well as the more than 1,200 miles of tidally influenced rivers and bays throughout the state.

The law supports the creation of new access points and the enhancement of existing ones, and is intended to provide the tools to defend against attempts to block access. It gives the NJ DEP broad regulatory power not only to create, enhance, and preserve public access, but also to ensure that there are necessary amenities in place to support it, including public parking and restrooms. The new law will have significant ramifications for landowners, municipalities, and developers, and will affect planning, zoning, and new construction in affected areas. It does not change the landscape, and standard title insurance exceptions for the rights of the public remain the same, but it is notable that some 1,500 years later Roman Emperor Justinian and Governor Phil Murphy wound up on the same page.

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

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Homebuyer's protected by Notice of Settlement

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!

Notice of Settlement protects buyers and lenders.

In New Jersey, the status of title and mortgages is officially established by the recording of documents in the County Clerk’s Office. For example, a home buyer will record his deed,  which then places a copy of the deed within the real property record books for that county. The original deed is then returned to the purchaser.

How to protect against fraudulent acts?

New Jersey law permits the recording of a document called a notice of settlement to show the world that an owner is about to sell or mortgage their property. Lenders will require borrowers (usually through their title companies) to file a notice of settlement prior to the loan closing. The notice of settlement will include the name and address of the borrower, an identification of the property and the name and address of the lender.

Thus, if a notice of settlement for Lender A is recorded on June 1, from that date forward, Lender B is considered to have notice of the borrower’s intention to take a loan from Lender A. The recording of the notice of settlement helps to establish priority of recorded documents and to advise interested parties of ongoing transactions with respect to a particular property.

A notice of settlement is effective for a period of 60 days from date of recording, which means that the deed or mortgage mentioned in the notice of settlement must be recorded during that time period in order to enjoy the protection of this procedure.  There is a renewal period.

A  professional title agent knows how to protect you!  Don't buy a home without title insurance.

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
or
1500 Allaire Avenue, Suite 101
Ocean, NJ 07712

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

E-mail sflatow@vested.com

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New Jersey suburbs - having deer as neighbors

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!

Having lived in the wilds of suburban Essex County, New Jersey, I can personally testify to the incredible number of deer roaming through wooded areas; such as the one that bordered my home.  I once read that there are as many deer now as there were in the time of the Revolution.  The reason, we killed off their natural predators.

www.pexels.com

In any event, they are back with an annoying vengeance.  Here's an interesting article on the problem from the New York Times

Deer Make the Worst Neighbors

Like many of us who choose to live in the suburbs, deer want a nice, safe neighborhood, with great food and plenty of privacy. For one particular doe and fawn, that neighborhood happens to be my backyard. 

 Sure, they’re quiet — come to think of it, I’ve never heard them make a sound. And the little one covered in Bambi spots sure is cute. But let’s face it, they’re rude neighbors. When I ask the mother to leave by, say, pounding on my kitchen window with a spatula, she stares back at me blankly and pees. 

 Sometimes, she deposits her fawn in my shrubs for the day while she runs off to do whatever it is deer do with their time when they’re not devouring my marigolds. I’m not a free babysitter, but she seems to think I am. And the fawn is under the impression that we can’t see her, even as my children crouch, perplexed, to get a better look at the little speckled creature crushing my lamb’s ear. 

 I’ve tried using subtle hints to let them know I want my space, like spraying my foliage with an organic concoction that smells like sour milk and claims to repel deer, but actually only repels people who like to sit near flowers. Sometimes, they take a hint and venture off — I imagine them taking long strolls in the nearby nature preserve, another suburban selling point. 

 No sooner have they left, though, when another mother shows up. How do I know she’s not the same one? A hint: this one has twins.

 You’d think I live far out in the country, in some area of thick woods and wild mountains. But no, I’m only 20 miles from Midtown Manhattan in New Jersey, the most densely populated state in the country.

 Blake Smith, who moved from Brooklyn to West Orange, N.J., 13 years ago with her husband, Tim, 49, can see the Empire State Building from her back deck, but it’s the deer that take her breath away.

 “They’re like these mystical creatures,” she said. “They’re like unicorns.”
 More like shameless interlopers. A few weeks ago, a deer pushed its way into Ms. Smith’s screened-in porch to get ahold of some potted hibiscus. Ms. Smith, 45, an associate director of digital at the New York Eye and Ear Infirmary of Mount Sinai, had moved the pots inside so they wouldn’t become deer salad. 

 So much for that. Ms. Smith gave up and put the pots back outside. “I told them, ‘Have them, just eat them. Just please don’t eat my watermelon,’” she said. 

 Ms. Smith knows these deer well. They are members of a herd that has lived in a vacant lot behind her house for years, with a doe that the family named Limpy for her uneven gait. Perhaps because they’ve been neighbors for so long, the deer listened to her about the watermelons and so far have left them alone. The hibiscus they ate.

 Whitetail deer are a source of suburban awe and angst. They were hunted to near oblivion in the late 19th century, but their numbers are back and they’re seemingly everywhere. New Jersey doesn’t even know how many whitetails call the Garden State home, since government estimates are based, morbidly, on the number of deer that hunters kill each year, which hovers around 50,000. In areas where hunting is prohibited, like my backyard, no one is tracking the herds.

 “It’s really hard to get a population estimate, especially in a fragmented, densely populated state like New Jersey,” said Brooke Maslo, an assistant professor of ecology at Rutgers University.

Read the full article.

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

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