How much is my property tax?
Property tax is one of the most important issues when it comes to purchasing your future home. Calculating the property tax of either the place you are thinking of buying or your current residence can give you a clearer sense of the financial situation.
Property taxes are the main source of income for local governments. It is used to fund the public services, like public school, government operations, public parks and etc. Each city sets up their own tax rate yearly based on their budget divided by total assessed value of all houses within the city. The city’s budget changes (mostly likely increases) every year hence so does their tax rate. The assessed value of the house usually stays the same except for a few scenarios.
The first scenario is when the city does a revaluation. A third party appraisal company would go through each house within the city to assess the value of the property. You could imagine how time consuming and costly it would be to do a revaluation. Therefore it happens rarely.
The owner successfully appeals the property tax is the second scenario. Appealing tax is to reduce the assessed value of the property. If the owner thinks the market value of their property is lower than what the assessed value implies, they could file for tax appeal and provide proof of what the market value should be.( There will be an article about tax appealing in the future, so keep in touch with my website or subscribe future content here.) The city has a set of rules of how to determine the market value of properties which you can always look up to find the appropriate market value for your property.
The third scenario is when properties are under tax abatement, the assessed value would be reset to the purchase price after every transaction. The assessed value most of the time is lower than the market value. It doesn’t change when a sale transaction happens unless it is under tax abatement.
How much is my property tax?
Here are two simple formulas that to calculate your property tax. In these two formulas below, Property Tax Rate and Assessment Ratio are set by the city every tax year.
Property Tax = Property Tax Rate * Assessed Value
Assessed Value = Market Value * Assessment Ratio
If a condo located within Hoboken and its market value is $900,000, the assessed value of this property is $604,710, based on Hoboken assessment ratio is 67.19%. The property tax of this place is $9,669, equivalent to the assessed value of $604,710 multiplying by Hoboken property tax rate of 1.6%.
Property tax rate changes every year. Below is a list of 2019 property tax rate of all cities in Hudson County.
| City | Property Tax Rate | Assessment Ratio |
|---|---|---|
| BAYONNE | 8.63% | 34.13% |
| EAST NEWARK | 2.61% | 80.42% |
| GUTTENBERG | 3.83% | 72.01% |
| HARRISON | 7.26% | 33.60% |
| HOBOKEN | 1.60% | 67.19% |
| JERSEY CITY | 1.54% | 101.02% |
| KEARNY | 10.54% | 27.11% |
| NORTH BERGEN | 5.73% | 39.50% |
| SECAUCUS | 3.71% | 51.82% |
| UNION CITY | 7.10% | 36.69% |
| WEEHAWKEN | 1.66% | 104.06% |
| WEST NEW YORK | 7.56% | 29.27% |
I am Diana Tian. If you wanted to know more about property tax, contact me