Home Buying in Middletown>Question Details

JmNYC, Home Buyer in New York, NY

Are taxes adjusted based on purchase Price?

Asked by JmNYC, New York, NY Mon Oct 11, 2010

I have a house I would like to make an offer on. The taxes are very high. They are based on an assesment that is much higher than what it will sell for. In Middletown NJ, what happens in this senerio? Do the taxes auto-adjust based on the new purchase price? Or do you need to appeal?

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I would call the assessors office in your area and ask them the question. Always go to the source. That is the best place to get the right answer. Every state is different. We are having the same issue in Wisconsin. Homes that are short saled or forclosure are well below the assessed value you. Taxes are really high. We at this time are working every closely with the lenders so we stay on the same page. We are looking at payment not price of the home.

Debby Homestead Realty Inc
0 votes Thank Flag Link Sat Oct 16, 2010
Hey- Taxes are based on the ratio system adopted by municipality to funds its budget. The assessment figure isn't a good indicator, because the ratio could always be manipulated.

Consider a ratio of $30 per $1,000. This means that for every $1,000 of the "assessed" value you will pay $30. If a home is assessed at $100,000, then according to this example your tax bill would be $3,000. ($30x100).

The new price of a home doesn't have anything to do with the assessed value. I hope this helps.
0 votes Thank Flag Link Thu Oct 14, 2010
Having recently won a tax appeal against my city, I can say that you do not need an appraisal (Also note, they did NOT know I was in real estate nor did I mention it at anytime during the hearing). A gathering of recent sales information for comparable properties in your area is sufficient. But FIRST, I would recommend that you look at the value the municipality places on the property. You can get PART of this info from the assessed value. But you still need to know the formula the town uses along with the assessed value to determine what they think the market value is (there's a term for it which I can't remember). For example, I found out that my town decided that the market value of my home is equal to 97% of my tax assessed value ($297k). That means my town figured that the market value of my home was $288k. I simply brought in comps that showed the value of my property was closer to $225-235k.

But there are specific guidelines and deadlines for doing this (I think you have to file by April 1 or 45 days after the Notice of Assessment is completed). So check with your county tax board (I wouldn't check with the city on this).

If you’re buying now, there’s no guarantee that you will win a tax appeal. So keep that in mind when and if you purchase the property in which you’re interested.

And feel free to let me know if I can be of further assistance. Good luck.

Ibrahim S. Hughes
EXIT Queen’s Realty
Realtor Associate
0 votes Thank Flag Link Mon Oct 11, 2010
You will need to appeal, but be cautious about paying for an appraisal to do it. Appraisals can take care of the issue today, but the county assessor is just going to reassess in a year or two and the appraisal you had isn't taken into consideration anymore. Your home will be assessed accordingly with the homes around it.

It is rediculous, but be aware of it.
0 votes Thank Flag Link Mon Oct 11, 2010
Dear Jim,

As Mark stated, you would need to appeal the current taxes. Here is a link to a guide that is available from the Monmouth County Board of Taxation. You can copy and paste it.


This booklet should provide you with all the information you need. You can also contact the tax assessor in Middletown directly, if you have any additional questions. I hope this helps you.

Patty Lipert
Heritage House Sotheby's International Realty
1020 Hwy 35
Middletown, NJ
Web Reference: http://www.PattyLipert.com
0 votes Thank Flag Link Mon Oct 11, 2010

You need to appeal to get a reduction, and that will require an appraisal. Taxes do not auto-adjust. Also keep in mind that regardless of the assessment, the appraisal will have to prove that the property is taxed unfairly vis-a-vis other similar homes. So look at the other recent similar closed sales very carefully. If they have similar taxes to the home you are interested in, you will probably not get a reduction regardless of the assessment. All properties have dropped in value, but that does not mean the town needs any less money.

Good luck!

Marc Paolella
Relocation Director/Appraiser
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Coolest map-based home search: http://www.marcpaolella.com
0 votes Thank Flag Link Mon Oct 11, 2010
Hi Jm,

I had a client purchase a home in Basking Ridge about two years ago. The taxes were based on an assessment that was WAY over the sale price. They were ready to go to the township to contest when they got their new assessment card in the mail - and it had already been adjusted.

I assume though - in fact, I would guarantee - that each municipality is different. Call the assessor's office in Middletown and ask them. They will certainly have an answer for you.

Good luck!
0 votes Thank Flag Link Mon Oct 11, 2010
I don't believe so. You need to contest the taxes and what I have suggested is you go in there with your sales contract and a copy of your lender appraisal next time there is a window open to contest your taxes. In my listings if the house is assessed way higher than the asking price I promote that point as to get it out in the open and make a case for the valuation of the subject property. I would suggest you write up the offer with an agent of your choosing and if it is accepted you will need to pay for an appraisal to get a mortgage. If it doesnt appraise out you can get out of the deal or renegotiate the price provided you have a place to say it must appraise at sales price.

if you like my answer, please mark best answer -thanks!
good Luck
0 votes Thank Flag Link Mon Oct 11, 2010
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