More on property taxes --- StayNJ. A future disaster?

As I understand it, Tax freeze and other rebates will be replaced with this program. Seniors with income below $500k will have half of their property taxes refunded by the state. 

First of all, anyone with an income of $500k doesn't need a rebate. I am open to debating what the maximum income level should be but I don't believe it is $500k.

Then to the nuts and bolts of the thing. Half of our property tax payment will be refunded. That is fine for the first couple of years. Under the present Anchor program, we will get a refund of about $4k this year. Under StayNJ, we will get $9k. in 2026. 

But as the tax bill increases, year after year, we will eventually end up with less of a refund than the present Freeze offers. (Unless we assume room temperature in the next several years.)

Included in this discussion, is the question of where this money will come from. The state can't pay it's pension bills, public transportation bills and whatever. Raising taxes isn't going to happen. 

Am I missing anything or misinterpreting anything? 

Well, you are complaining about a tax break that the rest of us will have to pay for so that you can stay in a valuable home.  When your estate sells that home will the state be able to claw back the taxes you are avoiding?  Is that what you meant?

Formerlyjerseyjack said:

As I understand it, Tax freeze and other rebates will be replaced with this program. Seniors with income below $500k will have half of their property taxes refunded by the state. 

First of all, anyone with an income of $500k doesn't need a rebate. I am open to debating what the maximum income level should be but I don't believe it is $500k.

Then to the nuts and bolts of the thing. Half of our property tax payment will be refunded. That is fine for the first couple of years. Under the present Anchor program, we will get a refund of about $4k this year. Under StayNJ, we will get $9k. in 2026. 

But as the tax bill increases, year after year, we will eventually end up with less of a refund than the present Freeze offers. (Unless we assume room temperature in the next several years.)

Included in this discussion, is the question of where this money will come from. The state can't pay it's pension bills, public transportation bills and whatever. Raising taxes isn't going to happen. 

Am I missing anything or misinterpreting anything? 

Yes!  You are missing a lot.  If you read the link I posted in the related thread, you would know that Stay NJ will not take effect any earlier than 2026.  Even then it will not take effect at all if the State pension plan is not fully funded.  There will also have to be enough of a State budget surplus to fund the program.  As you note, there are a lot of vested interests competing for our State tax dollars.   Pressure to increase state funding for NJT is just one example of another direction State funding may take. 

You would also have read that the maximum an eligible tax payer would receive in 2026 is $6,500.  This includes anything the taxpayer would have received from Senior freeze and/or ANCHOR.  Since the maximum ANCHOR payment per real property for this year is $1,750, I don't know where you are getting an ANCHOR payment of about $4,000. (Can you please provide your source for this?) Nor, do I see where you would be getting $9,000 in 2026 when the maximum payment is $6,500.  (How did you arrive at that calculation?)

You are correct in saying that higher income residents will benefit more from Stay NJ than lower income residents, in part because they do not qualify for either Senior Freeze or ANCHOR under present income restrictions.  With the current cap (2026), those in higher real property tax communities like ours will receive less relief than those in lower real property tax communities if you measure relief in terms of the percentage of real property taxes that the State will provide in income.  Few of us, if any, will see a 50% decrease in what we pay in real property taxes.

joan_crystal said:

Yes!  You are missing a lot.  If you read the link I posted in the related thread, you would know that Stay NJ will not take effect any earlier than 2026.  Even then it will not take effect at all if the State pension plan is not fully funded.  There will also have to be enough of a State budget surplus to fund the program.  As you note, there are a lot of vested interests competing for our State tax dollars.   Pressure to increase state funding for NJT is just one example of another direction State funding may take. 

You would also have read that the maximum an eligible tax payer would receive in 2026 is $6,500.  This includes anything the taxpayer would have received from Senior freeze and/or ANCHOR.  Since the maximum ANCHOR payment per real property for this year is $1,750, I don't know where you are getting an ANCHOR payment of about $4,000. (Can you please provide your source for this?) Nor, do I see where you would be getting $9,000 in 2026 when the maximum payment is $6,500.  (How did you arrive at that calculation?)

You are correct in saying that higher income residents will benefit more from Stay NJ than lower income residents, in part because they do not qualify for either Senior Freeze or ANCHOR under present income restrictions.  With the current cap (2026), those in higher real property tax communities like ours will receive less relief than those in lower real property tax communities if you measure relief in terms of the percentage of real property taxes that the State will provide in income.  Few of us, if any, will see a 50% decrease in what we pay in real property taxes.

My information came from a blurb-summary of the program. 

That is why I posted the question.

Formerlyjerseyjack said:

My information came from a blurb-summary of the program. 

That is why I posted the question.

Here is the link I posted to your related thread:  https://pub.njleg.state.nj.us/Bills/2022/AL23/75_.HTM   It leads to the complete text, including additions and deletions, of the bill that was just signed by Governor Murphy.

Can you please supply the date and source of the blurb-summary which served as the basis for both of your threads?  A direct quote of the entirety of the source would be even more helpful if we are to answer to your questions effectively. 

My quick reading of the Senior Tax Freeze is that it only applies to increases in property tax.   Thus, if your yearly property tax goes up $500, that is the amount that may apply to the tax freeze.  I have not yet applied and of course,  will look at all the details.   

DanDietrich said:

Well, you are complaining about a tax break that the rest of us will have to pay for so that you can stay in a valuable home.  When your estate sells that home will the state be able to claw back the taxes you are avoiding?  Is that what you meant?

Despite that our house is one of the "poorer" houses in Maplewood ---- Ivy Hill Plaza is across the street and the neighborhood is sometimes filled with the sound of screeching kids from the daycare center.... Cars parking on the street blocking access to the driveway, sirens going off on Irvington Avenue, slobs walking along the sidewalk and throwing empty wrappers, Chinese food containers, whiskey and bottles and paper into the hedges and onto the berm that I have to pick up---- despite that, we love the house.

But to your point, probably neither you nor I will have heirs that pay an estate tax when we die. My estate is not worth enough to be taxed. But I can envision a time or circumstances when I might have to move.

When you are considering tax allocation, apportionment, exclusion and so forth, there are people who benefit and others who pay for those benefits. For instance, people who commute on the parkway and turnpike, pay tolls. Peeps who travel on 78, 80, 22, 287 and so forth, do not. Both pay the same amount of gas tax. Is one group subsidizing the other?

Should corporations and millionaires and billionaires who live in the western N.J. estates ... should their taxes be higher? The rest of us are paying for what they should be paying. Or should they? You tell me.

This morning's Ledger had an article about state second level executives with pensions in the high six figures. I am a retired public school teacher. I haven't had an increase in my retirement pension in 14 years. 

So, to quote the great "Consonant Man" who used to post here,

"Carry on."

RobertRoe said:

My quick reading of the Senior Tax Freeze is that it only applies to increases in property tax.   Thus, if your yearly property tax goes up $500, that is the amount that may apply to the tax freeze.  I have not yet applied and of course,  will look at all the details.   

You are correct.  However, the Senior Tax Freeze freezes your real property tax at your base year. For example, if your real property tax in your base year was $20,000, and your taxes went up $500 in the first year, you would be reimbursed $500.  If your taxes went up another $500 in year two, you would be reimbursed $1,000 because your taxes have now gone up $1,000 from your base year.  There are a few catches.  One is that the Senior Freeze may go away in 2026 to be subsumed by Stay NJ.  If/when this happens, due to the reimbursement cap in Stay NJ, your reimbursement from the State could go down, possibly considerably.  Another is that you have to qualify every year.  A bump in income taking you above the income cap for that year not only disqualifies your for that year but resets your base year to the next year you qualify.   

Formerlyjerseyjack said:

Despite that our house is one of the "poorer" houses in Maplewood ---- Ivy Hill Plaza is across the street and the neighborhood is sometimes filled with the sound of screeching kids from the daycare center.... Cars parking on the street blocking access to the driveway, sirens going off on Irvington Avenue, slobs walking along the sidewalk and throwing empty wrappers, Chinese food containers, whiskey and bottles and paper into the hedges and onto the berm that I have to pick up---- despite that, we love the house.

But to your point, probably neither you nor I will have heirs that pay an estate tax when we die. My estate is not worth enough to be taxed. But I can envision a time or circumstances when I might have to move.

When you are considering tax allocation, apportionment, exclusion and so forth, there are people who benefit and others who pay for those benefits. For instance, people who commute on the parkway and turnpike, pay tolls. Peeps who travel on 78, 80, 22, 287 and so forth, do not. Both pay the same amount of gas tax. Is one group subsidizing the other?

Should corporations and millionaires and billionaires who live in the western N.J. estates ... should their taxes be higher? The rest of us are paying for what they should be paying. Or should they? You tell me.

This morning's Ledger had an article about state second level executives with pensions in the high six figures. I am a retired public school teacher. I haven't had an increase in my retirement pension in 14 years. 

So, to quote the great "Consonant Man" who used to post here,

"Carry on."

I just looked at College Place on Zillow.  Of course, I have no idea where you live in that area but the whole street ranges between about $640k to 790k. For someone who has been there a long time that's a lot of equity.  If you need a break to stay in that house you should have plenty of other options.  A reverse mortgage, maybe.   I just don't see why those of us who have wealth in equity should get tax breaks.  I'd rather have that money go to those who have no recourse.

DanDietrich said:

I just looked at College Place on Zillow.  Of course, I have no idea where you live in that area but the whole street ranges between about $640k to 790k. For someone who has been there a long time that's a lot of equity.  If you need a break to stay in that house you should have plenty of other options.  A reverse mortgage, maybe.   I just don't see why those of us who have wealth in equity should get tax breaks.  I'd rather have that money go to those who have no recourse.

Reverse mortgage is one of the worse decisions a homeowner can make. Its interest rate is higher than a re-fi or home equity. Its fees are also higher than the other options.  

Historically, they have higher default rates than the other options.

Yes, wouldn't be my first choice.  But still, the availability of that option means that tax breaks aren't really needed. 

DanDietrich said:

I just looked at College Place on Zillow.  Of course, I have no idea where you live in that area but the whole street ranges between about $640k to 790k. For someone who has been there a long time that's a lot of equity.  If you need a break to stay in that house you should have plenty of other options.  A reverse mortgage, maybe.   I just don't see why those of us who have wealth in equity should get tax breaks.  I'd rather have that money go to those who have no recourse.

The intent of programs like Senior Freeze  and Stay NJ is to make it possible for seniors to stay in their home.  Life changes such as loss of a regular paycheck due to retirement, disability, or age discrimination in the workforce, death of one’s spouse, declining health, etc which are more likely to adversely impact older adults can reduce one’s income to the point where they can no longer afford to pay the full real property tax in Nj.  Keeping older adults in the community benefits everyone.  Older adults are less likely to have school aged children in the household which in the aggregate can keep down school taxes. They are more likely to volunteer their time and life skills than younger adults who are still full time employed and raising children. They have a wealth of knowledge which can benefit others.  To your point regarding home equity, not all older adults have a fully paid off mortgage or are free of debts and home loans The equity is not all ways there  despite the increase in property value.  Inflation, home maintenance, and structural improvements can significantly reduce what you perceive of as being a windfall  profit.   All of us who pay taxes do not use all of the services those taxes provide.  Taxes support the good of the entire community rather than a given individual’s needs.

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

DanDietrich said:

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

Then we get to the question --- if the geriatric population sells their house and moves? Where to? Some geriatric housing choices continue, so as to be near children and grandchildren. 

Then comes the question, What would they be able to afford? The geriatric assisted living stuff runs around $7k per month, to start. Depending on tax situation (taxes on the equity increase) the money from the sale of our mansion in Maplewood would last maybe 7 -10 years .hen what?

Replacing the house? I was amazed to see some new box houses on Rt 9 in Manahawken STARTING at $750k. 

I know, there's always Florida.

There is a house near me that was purchased by a private LLC for a price that was about $200,000 above the average price in our neighborhood.  This sale was six months ago and the house is still vacant.  They are not taking care of the property and after cutting their lawn three times, I called the Township inspection office.   They are now cutting just the front yard grass.  I tried to look up the investment company on Google, but could not find anything.  I am not sure how this will affect my property tax and I am sure that there will be no Senior Tax Freeze applying.  The newspaper had stories about private LLCs buying properties with high housing demand areas such as NYC, but locally is new.  What is going on?   

DanDietrich said:

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

Where would this nice apartment be?  There is a severe shortage of apartments designed with older adults in mind.  Senior buildings in our area have wait lists of five years or more, assuming the wait list is even taking additional applications.  How much more would a market rent apartment cost per month than what the senior is paying now for real property taxes (often subsidized by senior freeze or other State assistance program) and home maintenance)?  Could a senior on a fixed income who qualifies for the senior freeze program be able to afford to move?  You keep assuming that seniors have sizeable equity in their property, many do not.  Even those who do would see that equity eaten up substantially by taxes, closing costs, moving expenses, etc.  Most seniors in our community have support systems in place relying on family, neighbors, friends, and social programs to enable them to live safely and comfortably.  They have social networks, doctors they trust, community resources they have come to rely on.  How do these get reconstructed in a new neighborhood where they arrive as a stranger?  Why is it the senior who must be displaced?  

joan_crystal said:

Even those who do would see that equity eaten up substantially by taxes, closing costs, moving expenses, etc.   

Indeed, we worked for a long time to get to the point where we aren't carrying a mortgage anymore. Why would we want to increase our monthly fixed housing cost from, let's say $1500, to $4000?

DanDietrich said:

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

As a former Maplewood homeowner who now lives in an apartment in a senior community, I find this a mean and shortsighted comment. Seniors who are still fortunate enough to own houses in town still patronize local Maplewood businesses, pay service providers for home related services, pay taxes for municipal services they may no longer use, and have every right to stay in their homes as long as they are able. I wish I had done that.

I happen to have sold my Maplewood home a decade ago, so the then-young family that bought it has seen its value more than double since they purchased it. Surely you are not also of the opinion that seniors should sell homes at artificially low prices in what is now an an inflated market to make room for those young families that you assume will be superior citizens for our very appealing and diverse community. 

DanDietrich said:

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

The challenge of housing is much more based on lack of adequate development and construction than people hoarding housing stock.  The solution is investment in housing, not throwing people out of their homes.  Also, people who use the schools are, as Joan points out, often net negatives on taxes, costing the community more than they contribute.  Empty nesters use fewer resources at the local level.

Lastly, more and more of the people this will effect are GenX, as the last of the Boomers are turning 65.  So the trite 'boomer' slur is unfounded and beneath you.

The property taxes on my 4-bedroom "middle" Maplewood home are significantly less than the typical rent for one of the new (typically 2-bedroom) apartments in town so there really isn't financial incentive to sell as long as we want to stay in the area and can manage living in the house and paying the taxes. Of course it helps that we bought the house before Midtown direct and have paid off the mortgage now. 

Also, I do NOT think that the qualifying income for the property tax rebate should be nearly as high is $500K. Anyone with that income should be well able to pay those taxes. 

Okay.  Have your cake and eat it too.  The rest of us will pick up the slack.  I can't believe I dared to challenge you about another tax break that you want for yourselves.  

Bluehouse1 said:

Seniors who are still fortunate enough to own houses in town still patronize local Maplewood businesses, pay service providers for home related services, 

Them's the lucky ones. I hand mow my lawn and buy as little as possible so's there's almost no garbage to pay for.  Eating a local restaurant? Gone. Starbucks? What's that?

We light our rooms (one at a time)  with whale oil. After 8:30, the house goes dark. 4:30 in December. 

Heat? I take a brick and bring it to town hall and put it on the radiator. Then I bring it home to but in the bottom of my bed. 

Summer - well we keep the windows open ( 'sept the one that has the hole in the screen).

We subscribe to "Frugal Living" magazine. Let me know if you want more tips.

Formerlyjerseyjack said:

Them's the lucky ones. I hand mow my lawn and buy as little as possible so's there's almost no garbage to pay for.  Eating a local restaurant? Gone. Starbucks? What's that?

We light our rooms (one at a time)  with whale oil. After 8:30, the house goes dark. 4:30 in December. 

Heat? I take a brick and bring it to town hall and put it on the radiator. Then I bring it home to but in the bottom of my bed. 

Summer - well we keep the windows open ( 'sept the one that has the hole in the screen).

We subscribe to "Frugal Living" magazine. Let me know if you want more tips.

I would love to hear Scully’s take on this…

Well, he DOES mow the lawn…

DanDietrich said:

Yet there is an incredible housing shortage for young families while boomers stay in big old homes.  So I see no need to use tax dollars to help them.  That young family would spend plenty of money in town as well.  Sell the home, rent a nice apartment and enjoy the extra cash from the home sale.  I know there are exceptions, but most folks around here could do this.

My parents refuse to give up their house, it’s a part of their American dream. As are many of my friends parents and it seems to be a generational thing as many of my peers have no interest in owning a home and gladly pay rent to whichever developer has the nicest amenities. You can bet when they inhereit it, the house will be on the market faster than you can blink.