NJ Real Estate Unit 8: Real Estate Taxes

Ad Valorem Tax

tax set according to value

Assessed Value

value used for tax purposes

Assessment Roll

list of all taxable propety

Equalization Factor

adjusts for assessment variations

Full-Value Assessment

estimate based on probable sales price

Mill

one-thousandth 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

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

New Jersey offers partial property tax exemptions to

A) churches.

B) homeowners 65 and older.

C) licensed physicians.

D) owners of unused farmland.

B) homeowners 65 and older.

In New Jersey, the tax rate is expressed as

A) millage.

B) dollars per hundred of assessed value.

C) dollars per thousand of assessed value.

D) tax levies.

B) dollars per hundred of assessed value.

Property taxes become a lien on the land

A) as soon as the assessment roll is confirmed.

B) when they are individually recorded against each parcel.

C) only if payment is more than 30 days late.

D) every January 1.

D) every January 1.

Real estate is evaluated for property tax purposes by a(n)

A) appraiser.

B) building inspector.

C) assessor.

D) zoning board.

C) assessor.

A house valued at $120,000 is assessed for 80% of its value. The tax rate is $26.34 per $1,000. How much is the property tax bill?

A) $252.86

B) $2,528.64

C) $316.08

D) $3,160.80

B) $2,528.64

A tax on the houses in one small neighborhood, to pay for new street lamps in that area, would take the form of

A) an ad valorem tax.

B) eminent domain.

C) a special assessment.

D) a conditional-use tax.

C) a special assessment.

Some exemptions from real estate taxes may be granted to certain

A) veterans.

B) senior citizens.

C) religious organizations.

D) Any of these.

D) Any of these.

Which of these types of property is eligible for a different assessment rate?

A) Park districts

B) Forest preserves

C) Certain agricultural properties

D) Churches

C) Certain agricultural properties

An example of a special assessment is a tax to

A) build a bypass around the city.

B) pay for street lighting.

C) construct a new school.

D) expand a community college.

B) pay for street lighting.

During the statutory period of redemption, New Jersey property sold for delinquent taxes may

A) be redeemed by payment of back taxes, penalties, and interest.

B) be redeemed by payment of four times the delinquent taxes.

C) be redeemed only through a court proceeding.

D) not be redeemed.

A) be redeemed by payment of back taxes, penalties, and interest.

The chance to take at least $250,000 profit free of federal tax on the sale of one's home is available to any seller who

A) is over the age of 55 on the date of the sale.

B) buys a replacement home of equal or greater value within two years of the sale.

C) owned and occupied the home for two of the five years prior to the sale.

D) is married on the date of the sale.

C) owned and occupied the home for two of the five years prior to the sale.

A single person who bought her home 18 months ago is moving to take a new job in another city. A married couple who file jointly have owned their nine-bedroom home for only three years, and now they want to move to a small condominium unit. Another single person owned his home for 17 years wants to use the proceeds from his sale to purchase a larger house. Which of these people is entitled to the $250,000 exclusion from the federal capital gains tax?

A) The single person who bought her home 18 months ago

B) The single person who owned his home for 17 years

C) The married couple who have owned their home for three years

D) Both of the single persons

B) The single person who owned his home for 17 years

For purposes of determining capital gains tax liability, all of the following factors are relevant considerations EXCEPT

A) the marital or filing status of the taxpayer.

B) the profit realized on the sale of the home.

C) how long the taxpayer has lived in the home.

D) whether or not the taxpayer is over 55 years old.

D) whether or not the taxpayer is over 55 years old.

What is the federal capital gains tax exclusion available to home sellers who file their income taxes singly?

A) $125,000

B) $225,000

C) $250,000

D) $500,000

C) $250,000

Which of the following taxpayers is permitted to make a penalty-free withdrawal from their IRS to assist with their purchase?

A) A married couple selling their large home to buy a small condominium

B) A single person buying her first home

C) A single person selling a small condominium to buy a larger home

D) Any single person

B) A single person buying her first home

Which of the following statements about the ad valorem tax and special assessments is

correct?

A) Both taxes are calculated using the same method.

B) Both taxes allow a deduction for senior citizens and veterans.

C) Both taxes are levied for the general support or operation of the local government.

D) Both taxes are levied against specific parcels of property.

D) Both taxes are levied against specific parcels of property.

Taxes levied on a property owner to pay to install sidewalks or sewers are called

A) ad valorem taxes.

B) general property taxes.

C) special excise taxes.

D) special assessments.

D) special assessments.

After a real estate lein has been sold by the state or county to satisfy a delinquent tax lien,

the defaulted owner usually has a right to

A) have the sale canceled by paying the back taxes and penalties.

B) pay his or her creditors directly and have their liens removed.

C) redeem the property within the time specified by law.

D) record a notice of non responsibility for the unpaid taxes.

C) redeem the property within the time specified by law.

Married taxpayers who file jointly and have lived in their principal residence for at least

two years of the preceding five years are eligible for an exclusion from federal capital

gain taxes on a gain up to

A) $100,000.

B) $250,000.

C) $500,000.

D) $1,000,000.

C) $500,000.

Taxing authorities can determine a tax rate by

A) dividing budgetary needs by the assessment roll.

B) multiplying the assessment roll by the equalization factor.

C) multiplying the budgetary needs by .001.

D) subtracting the budget needs from the assessment roll.

A) dividing budgetary needs by the assessment roll.

The current market value of a property is $35,000. For tax purposes, it is assessed at 40

percent of market value. The tax rate of $4 per $100 of assessed value. What is the

amount of the tax due?

A) $560

B) $625

C) $705

D) $740

A) $560

A single homeowner has a $300,000 profit from the sale of her home where she has lived

for the past 18 years. The taxable portion of the gain would be

A) $0.

B) $50,000.

C) $150,000.

D) $300,000.

B) $50,000.

In New Jersey, a qualified war veteran is entitled to a reduction of real estate taxes in the

amount of

A) $250.

B) $1,000.

C) $5,000.

D) $10,000

A) $250.

Tax assessors in the state of New Jersey attempt to assess property at

A) 25 percent of value.

B) 50 percent of value.

C) 75 percent of value.

D) full value.

D) full value.

A low-income homeowner who is 65 years or older may qualify for a reduction in

property taxes in the amount of

A) $50.

B) $250.

C) $500.

D) $1,000.

B) $250.