Unit 8: Real Estate Taxes Flashcards

Vocabulary and key concepts regarding real estate taxes, assessments, and capital gains exclusions based on the Unit 8 lecture notes.

Ad valorem tax

Tax set according to value

Assessed value

Value used for tax purposes

Assessment roll

List of all taxable property

Equalization factor

Adjusts for assessment variations

Full-value assessment

Estimate based on probable sales price

Mill

$1/1000$ of a dollar

Ratable

A taxable property

Redemption period

Time in which a foreclosed owner can regain property

Revaluation

Reassessment of all a municipality's ratables

Special assessment

Tax only on property directly benefiting from an improvement, such as streetlights or wheelchair accessible curbs

Tax foreclosure

Seizing of property for unpaid taxes

Tax lien

Municipality's financial claim against real property

Tax sale

Collection of overdue taxes through public auction of property

Major source of funding for governmental functions

Ad valorem taxes

New Jersey tax rate expression

Dollars per hundred of assessed value

Tax lien commencement date

January $1$ of the year the assessment roll is confirmed

County assessor

Individual who evaluates real estate for tax purposes

Tax bill calculation example

For a house worth $\$120,000$ assessed at $80\%$ with a rate of $\$26.34$ per $\$1,000$, the bill is $\$2,528.64$

Ad valorem tax waiver eligibility

Senior citizens with limited income

Property eligible for different assessment rate

Certain Agricultural Properties

Statutory redemption period owner rights

The owner can repay back taxes, penalties, and interest

$\$250,000$ Capital gains tax exclusion requirement

The seller must have owned and occupied the home for at least two of the previous five years

Frequency of capital gains exclusion

Every two years, if occupied by the owner(s)

Federal capital gains tax exclusion (Married)

$\$500,000$ for couples filing jointly

Penalty-free IRA withdrawal

Permitted for a single person buying her first home

Formula to compute taxes for the year

Assessed value X tax rate