Home Buying in Jersey City>Question Details

Hhaoo, Home Buyer in Jersey City, NJ

PROPERTY TAX QUESTION - NEW PURCHASE now: how to prorate the tax for Q3 in New Jersey.

Asked by Hhaoo, Jersey City, NJ Mon Aug 13, 2012

We are buying a property now. The seller paid the property tax for Q1 and Q2 of 2012, which added up to 4000. We are looking to close in mid August, but the seller has not paid the property tax for Q3 yet, because the town has not come up with a tax rate for Q3 and Q4 yet (they do it once a year in August, for Q3&Q4 of this year, and Q1&Q2 of next year). The question is how much the seller has to contribute for his unpaid portion of Q3 tax. Assuming that amount is A.

The seller paid a total of 6000 property tax for last year. To me there are two reasonable ways of calculating that amount. 1, A is ROUGHLY half of the quarterly tax of last year 1500=6000/4, so it's 750; 2, A is ROUGHLY half of the Q2 tax which was 2000, so A is 1000. However, I was told it's calculated differently: A = days between closing(8/15/2012) and 1/1/2012 divided by 365, and then times that amount by last year tax-Q1&Q2 tax, which means A= 228/365*6000-4000= -252. That means I have to pay the seller 252...

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Answers

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First thing I would dp is first call the Property tax office for JC and find out what the taxes are for the property at (201) 547-4809. If its in another city or town look up the offices number on line.

If you getting a mortgage expect to pay a full years taxes in advance at closing. Your attorney can give you a better idea on what you will be paying it may be just a quarter. You can also call the mortgage company and ask how many months of taxes they require in escro.

Next to your question you will be responsible for the number of days left in the quarter. This should all be detailed on the HUD 1 which should be provided to you just before closing.

Like I said this is best answered by your attorney. Also if your working with a real estate agent they should be able to help you get the answers to these questions for your exact situation
0 votes Thank Flag Link Mon Aug 13, 2012
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