Legal Question in Tax Law in New Jersey

What exactly is a tax abatement?

I read in the paper today that homeowners in our town who make improvements (up to $15,000) will qualify for a 5 year tax abatement. 30% year 1, 24% year 2, 18% year 3, 12% year 4 and 6% year 5. We put on a new roof and knocked down and rebuilt a garage this year which cost us more than $15,000, so I would think we qualify for it. How exactly does it work? Is it something I have to apply for? Do we get to deduct $4,500 from our taxes (30%) for this year? Where does this go on the tax return? The article says homeowners will pay their taxes as before, however the new assessed value of their home is prorated accordingly. What does that mean? This is my first home, so I'm new to all this. Any help would be appreciated! Thanks!


Asked on 9/02/04, 9:42 am

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

Re: What exactly is a tax abatement?

This sounds like a local issue, not state or federal. Normally, when you improve a house, an increase is made to your assessment, which translates into higher real estate taxes. It sounds like your town has initiated a program to encourage home improvements, by deferring or abateing (not increasing the assessments) for 5 years. I suggest contacting your local tax collector or assessor to get the details and any forms required.

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Answered on 9/02/04, 10:47 am


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