The appraiser determines the average market value of the property, which is reviewed every two to three years.
But the owner annually has the right to apply for a revision of this amount. At the same time, it does not matter what price you bought a house for – what matters is how much it costs on the market on average.
Example. You bought a house for $ 450 thousand in New Jersey, its estimated value, according to the latest data, is $ 510 thousand.
For the calculation, about a third of the estimated value is taken (in some districts, this figure varies between 10-33%). That is, the starting point is $170 thousand.
Next, the coefficient of the equation is used, which is determined based on the price of the object. It can be 100% (in this case, the amount will not change), be lower (if the property in the area is very expensive) or higher (if the property has fallen in price). Let’s assume that in our case it will be like this: 170 thousand × 70/100 = $119 thousand.
Next, benefits are taken into account, which are applicable to pensioners, military personnel, low–income persons, as well as those for whom the object is the main place of residence (homestead exemption). Let’s assume that the last case is yours and the discount is $9 thousand. That is, after deducting the benefit, $ 110 thousand remains.
At the last stage, the amount is multiplied by the local rate. For the state of New Jersey, it is 2.35% (but in a particular county it may be higher or lower). 110 thousand × 2/100 = 2.2 thousand. Thus, the property tax that you will have to pay annually is $2.2 thousand.