Bill Text: NJ A4724 | 2016-2017 | Regular Session | Introduced
Bill Title: Requires inclusion of certain short sales of property when determining property tax assessments.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-03-20 - Introduced, Referred to Assembly State and Local Government Committee [A4724 Detail]
Download: New_Jersey-2016-A4724-Introduced.html
Sponsored by:
Assemblyman SEAN T. KEAN
District 30 (Monmouth and Ocean)
SYNOPSIS
Requires inclusion of certain short sales of property when determining property tax assessments.
CURRENT VERSION OF TEXT
As introduced.
An Act requiring the inclusion of certain short sales of property for purposes of determining property tax assessments, and amending P.L.1954, c.86 and P.L.1971, c.424.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1954, c.86 (C.54:1-35.3) is amended to read as follows:
3. True value for the purposes of this act shall be deemed to be valuation at current market prices or values, determined in such manner as the director may, in [his] the director's discretion, select. Short sales, in which the net proceeds from the sale are less than the amount of the debts secured by liens against the property, and which are a result of distressed financial circumstances of the seller, shall be included for purposes of determining true value. The director shall determine the ratio of aggregate assessed to aggregate true valuation of real estate of each taxing district. [He] The director may make such determination by reference to the county equalization table whenever [he] the director is satisfied that the table has been prepared according to accepted methods and practices and that it properly reflects true value or a known percentage thereof for the several taxing districts in the county. The director, with respect to any and all taxing districts, may use the assessment ratios reported in the Sixth Report of the Commission on State Tax Policy (Trenton, 1953) and may consider such other assessment ratio studies as may be available. [He] The director may make such further and different investigations of assessment practices as [he] the director may deem necessary or desirable for the establishment of the assessment ratios required by this act.
(cf: P.L.1954, c.86, s.3)
2. Section 1 of P.L.1971, c.424 (C.54:1-35.35) is amended to read as follows:
1. The Director of the Division of Taxation in the Department of the Treasury shall by rule establish standards to be used in the valuation and revaluation of real property to be used for assessment purposes and shall prescribe minimum qualifications for firms and individuals engaged in the business of valuing and revaluing all or designated portions of real property in a municipality under contract. The rule establishing valuation standards shall include the use of those short sale transactions, in which the net proceeds from the sale are less than the amount of the debts secured by liens against the property, and which are a result of distressed financial circumstances of the seller.
(cf: P.L.1971, c.424, s.1)
3. This act shall take effect immediately.
STATEMENT
This bill requires that property tax assessors include properties sold at certain "short sale" transactions for purposes of determining property tax assessments. The "short sale transactions" that would qualify for inclusion as usable sales data would be when the transfer of an ownership interest in real property is made even though the net proceeds from the sale are less than the amount of the debts secured by liens against property, and are due to the distressed financial condition of the seller.
Currently, property that is sold pursuant to a short sale transaction is not considered when determining fair market value by tax assessors for purposes of calculating property tax assessments. Short sale transactions are likewise not considered usable sales for purposes of property tax appeals. Under this bill, short sale transactions would be considered for both the determination of fair market value by a tax assessor for purposes of calculating property tax assessments, as well as for adjudicating property tax appeals.
This bill is limited to real property sold due to a seller's distressed financial circumstances. It does not apply to estate sales, meaning property is sold below market value prices because the previous resident of the property is recently deceased. This information could be obtained from the applicable recorded deed reflecting the transaction.
