What are the Property Taxes in Ocean County?

Property Taxes are determined by each municipality, not at the county level. Property Tax Rates in many Ocean County municipalities are among the lowest in New Jersey. Property taxes are a local tax, that is locally assessed and collected to pay for the operations of municipal and county governments. Property Taxes are not used to pay for State government, but a large part of it supports functions that the State has imposed on local units.

How is the Municipal Property Tax base calculated?
Each year school districts, municipal governing bodies, and county governing bodies adopted budgets to the County Tax Boards. The various budgets are totaled to represent the “amount to be raised by taxation” for each taxing jurisdiction. The tax budgets is divided by the total assessed value of all taxable property within the municipality, otherwise known as a “Tax Base”, to determine the general tax rate. The general tax rate is then applied to the assessed value of each individual parcel of property to determine the property owner’s tax liability.

Property Taxes rates are generally determined  by six factors:Ocean County NJ Property Taxes
1) Market value of the property
2) The cost of municipal and county programs and services
3) Costs of local public schools
4) Other revenues available to cover those costs
5) Amount of tax exempt properties in the municipality
6) Total Value of all the taxable properties in the municipality.

Property Tax Rates are generally presented  as either a General  or Effective Rate:

General Tax Rate
The General Tax Rate is a multiplier for use in determining the amount of  tax charged to each property. It is expressed as $1 per $100 of taxable assessed value.  This  rate is used to compute the property tax bill.

Effective Tax Rate
The Effective Tax Rate is a statistical study that enables the comparison of one district to another district (based on the assumption that all districts are at 100% valuation).  It is expressed as the actual property tax amount divided by the assessed value of the property. This rate is NOT to be used to compute the property tax bill.

How are Property Taxes for specific properties calculated?
Market Value , otherwise known as “Full Value” or “Fair Value” is the highest price the property could be reasonably expected to sell for under  normal competitive open market conditions.  Market Value  =  Value of the Land + Value of any permanent improvements on the land. The local Tax Assessor regularly estimates  the highest price each property would  expect to sell for under normal competitive open market conditions. This estimate otherwise known as an assessment,  is used to represent 100% or the Market Value of the property. To calculate the annual property taxes the total assessed value  is multiplied by the general tax rate.

How to I evaluate or compare Property Taxes ?
New Jersey has 21 counties consisted of nearly 565 municipalities, most of which have  their own local tax assessor. As such, evaluating Property Taxes using the Tax Rate alone can be a slippery slope. For example , a Town with a relatively low property taxes rate may  have relatively high-priced homes. Alternatively a Town with  relatively low property tax rates may have relatively low-priced homes. You need to consider both when evaluating  and comparing property taxes. There can be two towns very nearby with different tax bases . It may be best to determine the maximum amount you are willing to spend on property taxes and work from there.

What will the Property Taxes for Newly Constructed Home be?
Builders will frequently pay lower property taxes on undeveloped property. Actual property taxes for a newly constructed home usually don’t take effect until the home receives a certificate of occupancy and/or a buyer closes on the home, and the sale is recorded. The best way for a buyer to estimate what the property taxes might be is to multiply the properties purchase price by the general property tax rate. Alternatively, the buyer could look at property taxes for a comparable existing home in the same municipality as a guide.

Are Property Tax Relief Programs Available?
Actual property taxes due are often reduced by homestead exemptions, tax relief programs, tax relief credits, veterans deductions, senior citizen deductions, senior freeze deductions, disable persons deductions, financial assistance programs, reimbursement programs, statements of state aid and the like. Your accountant an/or tax professional can provide further guidance in this area.

Redistributing the Tax Rate
Over time a large disparity can arise from significant increases and/or decreases in the assessment of property in some areas versus other areas. Eventually a revaluation will be made to correct this disparity. The revaluation often leads to huge shifts in tax dollars. For every dollar that someone pays in additional tax, there is a person within the district paying a dollar less in tax. Through the reassessment of all properties to their market values, the scales become balanced, and tax burdens are accurately reassigned.