The average property tax bill in New Jersey, where I live, is $8,928. Compared to Alabama, where the average property tax bill is $742, it’s hard to believe that people can afford to live here.
But for many people, New Jersey is a way to get to the higher pay offered by companies in New York City without having to live in an apartment the size of a glorified shoebox. So, my family has lived in New Jersey for more than ten years, even though it can be very expensive to own a house in Garden State.
Fair enough, home prices in some parts of the state aren’t so crazy. The property tax bill that comes with your house is usually more of a problem. Even if you find an affordable mortgage, your taxes might end up costing more than your monthly mortgage payment, based on where in the state you live.
When my husband and I bought our current home about 14 years ago, we knew to set aside a lot of money in our budget for property taxes.
We also knew that we should put more money into our savings account before we bought our house. That turned out to be a really good thing, because the second year we lived in our house, we got a very nasty property tax bill.
When Your Property Tax Bill Is Wrong — and You End up Paying the Price
My family and I watched the house we live in now being built from the ground up. Even though there were pros and cons to getting a new house, one of the cons didn’t become clear until the second year we lived there.
When we first moved into our house, we were given an estimate of how much it was worth, which was used to figure out our property tax bill. We paid our taxes in full and thought that was the end of it.
A year later, our township sent us a letter saying that, since we had bought a new home, they hadn’t had a chance to properly examine it. Because of this, the first year we lived in our home, we paid less in property taxes than we should have. So, our township asked for a few thousand dollars more from us almost a year after we paid our property taxes for the previous year.
My husband and I were surprised and angry. We had no idea why we should have to pay that bill backward when it was our township that sent us the wrong bill in the first place.
But we also thought that if we tried to fight that bill by hiring a lawyer, it would cost us more in legal fees than the amount we were asked to pay. So, in the end, we took money out of our savings, wrote that extra check, and just dealt with it.
Be Careful When Buying New Construction
When getting a new construction home, you might have to pay extra for upgrades or find out that your builder isn’t including certain features (for example, we had to buy our own towel rods and bathroom lighting). But also, don’t be surprised if the first estimate of your property tax turns out to be wrong.
Even now, I’m not completely sure that our township had the right to go after us a year later for higher property taxes. But I’m still not the best person to figure that out because I’m not a real estate lawyer and don’t want to pay for one just to satisfy my interest.
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