Chapter 8 - Real Estate Taxes Flashcards Preview

New Jersey Real Estate Prelicensing Course > Chapter 8 - Real Estate Taxes > Flashcards

Flashcards in Chapter 8 - Real Estate Taxes Deck (13):

Ad valorem tax

A tax levied according to value;generally used to refer to real estate tax. Also called general taxes to fund operation of the government agencies that impose the taxes


Assessed value

Is what the current year's taxes are based on. New jesrey has set a goal of full-value assessment (almost impossible) taht is, asssessing real estate at 100% of its true market value.


Assessment roll

To arrive at at a tax rate, the total monies needed for the coming fiscal year are divided by the total assessments of all real estate located within the jurisdiction of the taxing body called the assessment roll. For example, a taxing districts budget needs $300,000 to be raised from real estate revenues, and the assessment roll of all taxable real estate within this district equals $10 million. The tax rate is computed $300/$10,000,000=$.03, or 3%.


Equalization factor

?The State Division of Taxation publishes tables of Equalization Rates to achieve uniformity among tax districts. An equalization factor may be needed to raise or lower taxes in a particular district or county. The equalization issue is important to local governments, because state funding of programs is based on assessed value of local real estate. The assessed value is multiplied by the equalization factor, and the tax rate is the applied to the equalized assessment.


Full value assessment

Assessment based on 100% of current market value a goal of New Jersey albeit impossible.



One tenth of one cent. A tax rate of 52 mills would be $0.052 tax for each dollar of assessed valuation of a property.



A taxable property.


Redemtion 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 sale price,interest and cost. If the a municipality purchases the certificate (tax sale certificate), the delinquent homeowner has six months in which to pay pay the money due and and redeem the property. if the certificate is is bought by a private party, the redemption period is two years. after the redemption period has passed, without the owner redeeming the property, the holder of the certificate may clear title by the legal process of foreclosure any time within twenty years. If the municipality forecloses on a tax sale certificate, it is through a judicial foreclosure before the court. The action is called rem proceeding against the property and and is available to municipalities only. It does not affect the tax debtor's credit rating.



Periodically an outside appraisal firm is hired to come in and assess every ratable in a municipality to bring everyone's assessed value up to current market value.


Special Assessment

Special taxes that require property owner to pay for improvements that benefit the real estate they own. These taxes are often levied to pay for streets, allies, street lighting, curbs and similar items and are enforced in the same manner as general real estate taxes. The proper authority spreads the assessments over a number of parcels that will benefit. In practice licensees should be very careful that the improvement is spread over a number of years and the new property owner may incur financial liability for continuing the payments.


Tax foreclosure

When taxes are unpaid six months after the tax year the taxing body can resort to tax foreclosure. the local tax collector is required to hold a tax sale of the property. Advance notices and the sale must be posted in five places in the municipality and advertised in a local newspaper for four weeks.owners of the property should receive notice of the forthcoming sale by mail; if they do not the sale is still valid.


Tax lien

Taxes on real property become a lien on January 1. Taxes are due starting on February 1 and additional payments may be made quarterly on the firs of may, August and November.


Tax sale

Held by the local tax collector if taxes remain unpaid after the tax year for six months. See tax forclosure.