Homestead Benefit Program

New Jersey offers homeowners a rebate program called the Homestead Benefit Program. It is sometimes referred to as the Homestead Rebate. The Homestead Benefit Program was enacted in the 1970’s to provide relief from the State’s increasingly high property taxes.

Who is eligible for the Homestead Benefit?

You may be eligible for the 2016 Homestead Benefit Program if, as of October 1, 2016, you:

  1. Were a New Jersey resident;
  2. Owned and occupied a home in New Jersey that was your principal residence*;
  3. Property taxes for 2016 were paid on that home; and
  4. Met the 2016 income requirements: (a) $150,000 for homeowners age 65 or over or blind or disabled; or (b) $75,000 for homeowners under age 65 and not blind or disabled.

*If you were not a homeowner on October 1, 2016, you are not eligible for a Homestead benefit, even if you owned a home for part of the year.

You are not eligible unless you are required to pay property taxes on your home. You are not eligible for a benefit for a vacation home, “second home,” or property you owned and rented to someone else. If you owned more than one property in New Jersey, you can only file an application for the property that was your principal residence on October 1, 2016.

How Can I Receive my Benefit?

There are two ways to get your Homestead Benefit. The first is a credit on your property tax bill. The second is a check or direct deposit BUT ONLY IF (1) your home was a unit in a co-op or a continuing care retirement community or (2) you indicated that you no longer owned your home.

If you sold your home or will close before November 30, 2018, you must answer “No” to the question of whether you still own the property. This way, you can choose to receive a check or direct deposit. If you don’t, you may lose the benefit altogether.

Our clients sometimes have trouble when they sell their home before a Homestead Benefit is applied to the property tax bill. Unfortunately, the options are extremely limited. The buyer can reimburse the sellers for the benefit amount after closing, if they agree. Alternatively, the benefit amount can be adjusted at closing, if the benefit amount is known. You should notify your closing attorney as soon as possible so that negotiations can be conducted with the buyer’s attorney.

The deadline to file the 2016 Homestead Benefit application is November 30, 2018.

To see how Homestead Benefits are calculated and for a list of other frequently asked questions, visit the NJ Division of Taxation’s website at: https://www.state.nj.us/treasury/taxation/homestead/geninf.shtml.

If you have questions about buying or selling real estate, please call us at 732.552.0900 to schedule a consultation. Costanzo & Russom Law Group, LLC handles hundreds of real estate closings all across the State each year. Let our experience benefit you!

Real estate corner: Home inspection issues

The biggest issues during real estate transactions tend to center around the results of home inspections. Oftentimes in this market, sellers feel as though they have already drastically reduced the purchase price for their buyer and are therefore not willing to make any further repairs or offer closing credits for issues that arise during home inspections. Buyers, on the other hand, want everything repaired, excessive credits, or to terminate the contract altogether. When the parties’ expectations are so far apart, it is sometimes difficult to reach a resolution. When this results in a terminated contract, it is particularly frustrating for sellers who have, at that point, kept the property off the market for a minimum of a couple weeks, losing exposure to the market, having to pay additional carrying costs, and having to explain to prospective buyers that the prior deal was terminated over home inspection issues—a red flag in buyers’ eyes.

Home inspection results almost inevitably devolve into negotiations regarding the final purchase price—a tense process. One of the best ways to avoid this tension is for sellers to spend the money and hire a licensed home inspector to conduct an inspection prior to listing the property. Sellers go through the expense of painting and cleaning their house before listing it, but rarely do they hire their own inspectors to evaluate the house and advise them of potential issues with the home.

At a minimum, conducting an inspection can make sellers aware of the problems with their house. Sellers may choose to repair those items that need to be repaired prior to listing a property so that, when a buyer does come around, issues regarding home inspections are less likely to arise.  Even if a seller does not want to spend money to make repairs to their property, home inspection reports can be shown to the buyer prior to entering a contract so that neither seller nor buyer makes any mistake as to  the “as is” condition of the property. Although we always recommend that buyers conduct their own home inspections, it is less likely that there will be any surprises during the inspection period if sellers act proactively and more deals would proceed to closing.

Have you recently sold or purchased a home? If so, would you have found the above information helpful? Is there a real estate contract with which the Law Offices of Apicelli & Costanzo can help you? Please contact us and let us know.

This blog post is for informational purposes only and is neither intended nor should it be interpreted to be legal advice or opinion.