What’s the scariest thing about Halloween? It’s that the following day is November 1, due date for the dreaded 4th-quarter real estate taxes. Taxes are no fun anywhere and never have been: a Sumerian proverb inscribed on a clay tablet dated c. 2400 BCE reads, “You can have a landlord, you can have a king, but the man to fear is the tax-collector.” Indeed. The advantage of property taxes over other kinds to the powers-that-be is that the owner can’t pretend the land doesn’t exist; it can’t be hidden away as gold nuggets can be. And if he doesn’t pay up, the property can be located, seized, and sold. Easy-peasy
|Sumerian tax receipt|
November 1 is particularly scary in New Jersey, since NJ has the distinction of the highest property taxes of any state in the nation. Despite a 23-cent per gallon increase in the gasoline tax that also went into effect this month, our gas tax is still only the 6th highest, but for real estate we’re #1. Back in 2011 the state legislature put a 2% annual cap on local property tax increases but left escape clauses. An obvious one is revaluation: in Prospect Park last year, for example, the tax rate went down but the tax levy rose 5.2% anyway due to revaluation. Also, towns and counties can exceed the 2% limit to meet certain types of commitments. This year 60% of towns and counties exceeded the nominal cap.
I sometimes hear homeowners (especially those who pay taxes through a mortgage holder, and so don’t examine the tax bills closely) tell me, “My taxes went down for 2017.” No they didn’t. That impression is an artifact of the way taxes are calculated. A tax bill shows the last two quarters of the current year and the first two quarters of next year. The amount owed for each of the first two quarters of next year is based on an average of all four quarters of the current year – this average is always lower than the last two quarters of the current year. When a 2017 budget is passed (almost certainly higher than the 2016 budget) the extra cost will show up in the 3rd and 4th quarters of the 2017/2018 bill. If you compare the first two quarters of 2016 (by digging out last year’s bill) to the first two quarters of 2017, 2017 will be higher.
The good news, if one can call it that, is that it is fully three months to the next quarterly payment. The other good news is that this particularly nightmarish election season will be over on November 8 – good only in the sense of “over.”
Then there are Thanksgiving and November birthdays, including my own. I can eat away my grumpiness with turkey and cake. Hmm… I’m already feeling better.
The Kinks: “The tax man's taken all my dough... All I've got's this sunny afternoon”