The Homestead Benefit is one of New Jersey’s most popular tax assistance programs, with roughly 520,000 homeowners who claim the credit.
The program is open to homeowners who are older than 65, blind or disabled and earn less than $150,000 annually, or homeowners under age 65 who are not blind or disabled and earn $75,000 or less, according to the state.
The program rebates around $600 of property taxes.
Why is it assumed that just because you are 65, you deserve a property tax rebate when earning up to $150,000 while young families earning more then $75,000 are not?
Pretty good, right? It gets better.
Seniors with an income up to $92,969 can apply and receive a check each year for property tax increases since they first year they were eligible. In other words from their point of view their taxes are frozen.
By the way New Jersey has the nation’s fourth-highest median household income. The median household income is $85,751 in New Jersey.
I think the logic behind property (asset) taxes is for the State to take as much as they can get away with and then give a little back as a psychological attempt to limit tax emigration. Most people receiving rebates probably view them as gifts from a magnanimous state. I think that all states with homestead exemptions tailor them with some incentive in mind. In New Jersey’s case, the state with the highest property taxes, the incentive might be to keep retirees in the state, who are more easily able to pick up and leave and since the general opinion is that ALL elderly are near destitution, it seems the FAIR thing to do.
In Florida, with many elderly residents, the homestead exemption is a $50,000 reduction of assessed valuation on property taxes and $25,000 reduction on school taxes. This benefit is available to all homesteaders (primary residence = > 180 days in state) regardless of age. There is also an additional benefit which was enacted into law called the “save our homes amendment” which limits assessed valuation increases to 3% or CPI increase whichever is less. As it turns out this amendment has a greater benefit than the homestead exemption over time.
I think Florida’s incentive is to draw people into the state not keep them from leaving.
Oh!, and no state income tax, but there is the hurricane thing and now collapsing buildings to think about.
A flat sales tax based on consumption is probably the easiest and most fair solution…everyone pays their FAIR share and the woke culture is less miserable 😭
No, it is not just New Jersey. Politicians know that seniors citizens vote and they buy their votes with special rebates just for seniors.
In San Francisco, the property tax rate and assessment is locked in at the time you buy your house and doesn’t change until the house is sold. Also, seniors within income limits can get rebates. If a senior is under an income limit, they can freeze paying their property taxes until the house is sold. This will fix the tax costs for seniors.
But how is this fair to a young family just buying a house? Their property tax rate has to cover all the uncollected or reduced tax bills of seniors and prior home buyers paying on properties that are asset at a value much lower than market rate. Two exactly identical houses sitting side-by-side bought 20 years apart can have drastically different property tax bills.
No, it is not just New Jersey. Politicians know senior citizens vote and buy them off.
In San Francisco it gets even better. Your house only gets re-assessed at change of ownership. So if you bought the house in the 1980s, you are still paying the 1980 assessment tax rate. If you are a senior, within income limits, you get a rebate. If you are under an income limit, you can freeze your property taxes and the money will be collected when the house is sold. This is great for the seniors since it fixes their costs in retirement.
But how is this fair? A senior gets to stay in their house while a young family who just bought a house has to pay a higher property tax rate to cover the lack of taxes that the seniors or prior non-senior homeowners are not paying. The federal government can offer all the FHA loans they want to encourage ownership but it will not correct for the unfair tax treatment in California. Now add California’s rent control and other zoning laws that result is discouraging builders from building affordable housing and you have a shortage of housing and sky high home and rental prices.