Do you know how much real estate tax you’ll pay if you move to Montgomery Township, NJ? If you’re like most potential home owners, you probably find conversations about models, square footage and paint colors more exciting than talking about real estate taxes. Understanding how much you’ll pay in taxes can help you create a fairly accurate estimate of your monthly carrying costs. We’ll address the property tax question and also explain what factors can increase or decrease your tax rate.
Montgomery Township residents paid an average $14,276 in real estate taxes in 2015. Although that might sound a little high, the Township actually ranked 39th in the state for real estate taxes.
Keep in mind that $14,276 is just the average amount homeowners paid. Rates increase or decrease based on a variety of factors, including:
If you buy a large home located in a prime area of New Jersey, such as Montgomery Township, you’ll pay more. The age and condition of the home also affect real estate tax rates. Owners of new homes typically pay more than owners of older homes because new homes are in excellent condition. Although your neighbors will pay less in taxes, they may also have to spend thousands of dollars on replacing a leaky roof or repairing a clogged sewer line or broken air-conditioning unit.
In most cases, you won’t have to repair or replace anything in your new home for years. If there is a problem during the first year, the new home warranty provided by your builder will cover the costs.
Expect to pay more if you live in a school district that offers an excellent education to its students. A good education isn’t cheap, but most homeowners don’t mind buying a little extra since good schools increase the resale value of a home. Real estate taxes also increase if they must be used to fund local programs and services. Before you decide to buy in a community, it’s a good idea to ask a few questions. Is the municipality planning to renovate or build new schools, parks or community centers? If so, expect your taxes to increase when it comes time to pay for construction.
The population density of your municipality also plays a role in tax rates. If you live in a very populated area, a greater number of people will be able to share the cost of taxes. Taxes in suburban areas tend to be higher because fewer people live in the area.
The number of taxable businesses is also a factor in real estate taxes. If your municipality doesn’t have many businesses or has a large number of non-profit organizations, expect your taxes to be higher than a neighboring community with a strong manufacturing base.
Expanding or renovating your house increases your home’s assessed value and the amount of your property tax. If you plan to add a bathroom or bedroom to your home after you buy it, keep in mind that those additions will increase your tax. It may make more sense to buy a new home that already has the space you need, rather than risk a significant increase in your taxes in a few years.
New homes not only offer an excellent return on your investment, but also save you money on repairs and maintenance costs. Fox Brook at Montgomery, a Country Classics Community, offers four to five bedroom homes that include the features you want, such as side garages, morning rooms, spacious kitchens and baths, large master suites, butler’s pantries, stainless steel appliances, gas fireplaces and security systems. Contact us today to arrange a visit.
Sources:
Hillsborough Patch: Who Pays New Jersey’s Biggest and Smallest Property Tax Bills
CNBC: Things That Make Your Property Taxes Go Up
http://www.cnbc.com/id/40658494