Will Jersey City's tax revaluation mean an opportunity for apartment buyers?
It may not sound sexy, but the Jersey City real estate world is abuzz with talk of the long overdue, impending tax revaluation, a process in which the city reassess the value of every single property in the city and adjusts its tax bill accordingly. Some residents' taxes will stay roughly the same, and some will go down. The segment of the population that is making headlines is the group that will see their taxes will go up—in some cases, dramatically, since this is the first revaluation in Jersey City since 1988.
Brigid D'Souza, a Jersey City CPA who runs the site Civic Parent, which is dedicated to demystifying the tax revaluation process, says that generally speaking, a third of residents will see their taxes go up, a third will see them go down, and a third will see them stay about the same.
"It's meant to restore equity," she says. However, she explains, it also means someone whose downtown single-family house was assessed at $90,000 nearly 30 years ago and now lives in a house valued at $1.2 million, could see their tax bill jump from $7,000 to $20,000. A majority of residents are aware of the coming change (85 percent of property owners have received their revaluation estimates, determined by an independent firm for the city) according to real estate professionals we spoke to. However, it's not having a huge effect on prices—at least not yet.
"Right now, there are more buyers than there are sellers. Inventory is still relatively low, so it's still a seller's market. I'm not seeing a huge decrease in pricing," says Jose Rodriguez of Keller Williams City Views, located in Fort Lee. "Right now, it's still talk. It hasn't taken place yet."
However, the city's fiscal year ends July 31, and the new tax rates will be on the books August 1st. And for those whose taxes are going up, this is the rough part: the increase is retroactive to January 1st, 2018. Though Rodriquez says he hasn't seen a downward movement of prices, he does think it could happen once those bills start coming due and reality sets in.
"That is a possibility," he says. You might start seeing [that factor] baked into the asking price."
Regardless, those house-hunting in Jersey City should be aware of the tax situation in the area and do their due diligence to make sure they know what the numbers are.
Elvira Quiray, owner of Elcan Realty and a Jersey City real estate broker for 30 years, reports that she's seen a little bit of movement on prices—in both directions—due to the revaluation.
"There are places where the taxes went down, and the price went up, and those that when the taxes went up, the price went down," Quiray says.
Generally, she's seeing some dips below what was before a fairly standard rate of $1,000 per square foot, particularly in new condos around town.
"There's a glut of condos, so you have some choices. What was $1,000,000 before is now $800,000," she says. However, this is really only true in smaller buildings of three or six apartments, not luxury buildings with lots of amenities. And the market for single- and multi-family houses remains competitive.
"There's still a lot of action because in most locations there's still less inventory," she says.
For the time being, it seems that the tax man is not dampening many people's enthusiasm for Jersey City real estate.
"Maybe once people get the bill [we will see some adjustment]," Rodriquez says, "But now I'm seeing multiple offers and highest and best situations."
You Might Also Like
