Monday, December 3, 2007

The Matawan Revaluations

For those wondering what will happen in the Aberdeen revaluations, it’s instructive to look at Matawan. Although the final numbers aren’t in, they won’t change much from the preliminary numbers. Next year, Matawan will likely appropriate (collect in taxes) about $22 million. The preliminary assessments roll is $1.035 billion. That leaves a tax rate of $2.12 per hundred dollars of value. In other words, to approximate your future tax bill, simply multiply your current assessment by 2.12%.

Most people will see a slight decrease or increase in their taxes up to a possible 10%. This is the standard annual tax increase +/- 5%. However, some people will witness dramatic increases or reductions in their property taxes.

For example, 59 Wyckoff St. was purchased in October, 2006 for $420,000. I was unable to contact the new owners but, even assuming an assessment a tenth below the purchase price, they’re looking at their property taxes jumping from $5,935 this year to over $8,000 next year, a 35% tax increase.

Both Matawan and Aberdeen have made their policies crystal clear: no assistance will be given to property owners to enable them to transition to the higher tax rates. Their reasoning is two-fold. First, everyone should pay his fair share. Second, the taxpayers would be unwilling to subsidize someone else’s tax deduction.

I disagree on both points. Although everyone should pay his fair share, I see no harm in allowing those hardest hit by the revaluations to transition to the higher property taxes. The municipality could provide financial assistance, essentially limiting a single year’s tax increase to 10%.

Secondly, I believe the residents of Matawan and Aberdeen are charitable enough to allow a few of their neighbors to transition to the higher taxes. 60% of our federal income taxes go to transfer payments. Our school district spends millions a year to help children with special needs. Certainly, we’d be willing to cut or postpone spending on certain projects to allow some of our neighbors a little time to adjust.

Matawan will not be implementing any assistance programs prior to the 2008 budget but there’s still time to pressure Aberdeen’s town council. Don’t be fooled by the “Don’t worry. Be happy.” crowd. Some of our neighbors will need our help.
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matawan advocate said...

While I agree, charity begins at home. What about vacant commercial properties? Is it true that a vacant commercial property receives a break in their property taxes? If so, that doesn't seem fair. Anyone know if this is true?

Aberdeener said...

That’s not quite accurate. As you’ve seen in your own property tax bills, the assessed value has two components – land and improvements. Improvements refer to all structures attached to the land (i.e. homes, buildings, swimming pools, etc.). When assessing a vacant property, the appraiser looks at “best use”. So, if the best use would be an office building, how much is the land worth?

Vacant land certainly pays much less taxes than occupied land but that’s only because there aren’t any improvements on it. In our area (as most) improvements are normally assessed far more than the land.

Another point is that commercial property is appraised using an income approach. Since income (i.e. rental income) has not risen nearly as fast as home values, most commercial properties will see their property taxes drop as their share of the assessments roll shrinks.

A final point is that commercial property is taxed at the same rate as residential property. Since Matawan and Aberdeen are primarily residential areas, the commercial property tax is a small portion of tax revenues so any changes won’t have much of an impact on homeowners.

matawan advocate said...

The information you provided is fascinating and should be made available to Matawan taxpayers through a newspaper article. What is the source as to how you obtained this info?

Aberdeener said...

Most information is public record and I'm not shy about asking government officials for additional data. Realty Appraisals, the company handling the revaluations, also provided information.

Thanks for all your support both here and on your blog. It means a lot to me.

Anonymous said...

Aberdeener - you are so misinformed. Taxes do not go up on a house by 35% because the assessment goes up by that much over sales -- the very point that you keep spewing the same nonsense shows how misinformed you are. The total amount of taxes is divided by the total of assessments. An individual tax bill is proportional to your share of total value in the town and has no relationship to the increase in assessment for an individual property.

Your facts simply are not correct in the real world, and what's worse is that it seems that you don't care that you are spewing misinformation. It is clear from your postings that you are disgruntled about something, but I don't know what.

Anonymous said...

I agree Anonymous - I saw the movie, "A Beautiful Mind" on cable over the weekend - Aberdeener's calculations seem to exhibit a sense of paranoia and fractured logic that is best treated with psychotropic drugs.

Anonymous said...

A story in a newspaper - Matawan Advocate? Aberdeener is fiction, as in not real, as based on a little of fact and lots of misinformed spice. Fact check for yourself -- but don't trust the Aberdeener!

Truth In Matawan said...

Attention anonymous and Reality Check--aka Tweedle Dumb and Tweedle Dumber.

Since simple math has proven beyond your ability to comprehend--both here and on other posts--let's try simple logic instead.

Anonymous--you lash out at Aberdeener by saying "A 35% increase in your assessment doesn't equal a 35% increase in your taxes." This is true. You are completely correct. It also has NOTHING to do what with Aberdeener said is happening. Try reading it again.

Look at the example of 59 Wychoff street again. It was recently bought for $420,000. But Aberdeener is saying assume it's assessed for a tenth LESS than that. A tenth of $420,000 is $42,000 and $420,000 - $42,000 is $378,000.

So, assuming it's assessed at a mere $378,000, multiplied by the stated tax rate of $2.12 per $100 value, the tax on this property would be $8013.60.

Aberdeener states that this would be a tax increase of 35% over their existing taxes. That means their existing taxes would have to be around $5936.

If you want to contribute something to the world other than your reactionary, jealous, ignorant rantings, let us know what the current taxes are on 59 Wychoff. If they're $5936 or so, Aberdeener is completely right. If they're LESS than that, Aberdeener is wrong--the tax increase will be MORE than 35%. If they're more than that, then they'll more than likely see a smaller tax increase. As if a 20% or 25% tax increase can be considered "small"...

Even though this post was written as plainly as possible to allow you to understand, I have the feeling any reply will be completely ignorant, displaying zero ability to comprehend the reality of what's going on. Which causes one to wonder, why are you even here...?

Anonymous said...

Truth in Matawan - You are proving your ignorance. The tax rate changes for the Township after revaluation -- it does not remain the same as it is now. Hence, if assessed value (total) of the Town doubled following revaluation, the tax rate would go from $2.12 to $1.06. That is the reality. Your ignorance should embarrass you.

Truth In Matawan said...

Check yourself, RC: The $2.12 figure was an approximation calculated by Aberdeener after stating the total property values and the total budget for next year. The $2.12 was then extrapolated. It wasn't based off this year's number, so your comment is not only nasty for no reason, it's wrong. Again.

Once more, if you want to say Aberdeener was wrong, please post what the current taxes are at 59 Wychoff, and we'll do the math for you.

Anonymous said...

Aberdeener may have calculated that number .. but not based on reality. His total budget number isn't real -- the calculation is on funds raised by taxes. I think that using this blog to mislead the public in an attempt to cause some kind of hysteria based upon a general distrust of government is nasty.

Anonymous said...

Also, the sale price compared to the new valuation is irrelevant when not considered in the context of total value for the borough. Some of you on here should try to learn a bit more about this before making blind assumptions. Why don't we wait to see what really happens in Matawan, as in what the net effect on taxes is -- which is what we all really care about. The rest of the talk on here is just that.

Truth In Matawan said...

No, he posted the new total assessment (preliminarily)--$1.03 billion. Read it again.

The numbers are solid, given the information we have, which no one is claiming to be final. They are a means to show an example.

I don't know why some people are insisting that there absolutely won't be homeowners who are getting huge tax increases in both towns; it's a mathematical certainty. Just as there'll be many more people with smaller increases, and even some people with decreases.

Aberdeener isn't taking out a full page ad in the paper making these claims, so cries that he's trying to incite hysteria are not only unjustified, they're patently ridiculous.

No, rather, Aberdeener, after holding public officials to task and getting the hard info in his hands, is drawing conclusions, that only certain interested parties are then actively seeking out on his website. Not exactly a major media outlet, so I don't think he's poisoning people's minds against the noble property tax system we have in place!

Aberdeener said...

Property assessments are being filed with the borough on Thursday, January 10th. However, it looks like the assessments won't be available to the public until Wednesday, January 16th.

In the meantime, I've been unofficially informed that the assessments are closely related to market prices and that many homeowners are looking at whopping tax increases. Overall, about 10% of homeowners should see their property taxes rise over 10% next year.

Anonymous said...

I just received my revaluation and have a question. This is my first house so I'm sorry if I sound ignorant. My revaluation is $207k. What are my taxes based on now? If I look at my tax bill it shows an assessed value of $78,700. When I bought the house it was assessed at $250k. If I'm understanding this correctly they vlued my house at more than double what I'm currently being taxed on. Is that right?

Aberdeener said...

Hold tight. I'll be posting an article on this tomorrow night or Sunday.

The magic number is 2.47.

On average, that's how much everyone's assessment went up.

In the post, I'll provide explanations on how to read your assessment and how to project your property taxes for next year.

Anonymous said...

I actually did some reading up and now understand that market value and assessed value are different. Based on the current assessment ratio it looks like the market value they sent me is lower than what I'm currently being assessed on. So I guess I just have to try to find out if there will be a change to the assessment ratio and the rate per $100.00