Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
SYNOPSIS
Requires detailed disclosure of information concerning required payments in lieu of property taxes to be provided to purchaser of real property constructed pursuant to financial agreement containing long term tax exemption.
CURRENT VERSION OF TEXT
As introduced.
An Act requiring the detailed disclosure of information concerning payments in lieu of property taxes that would be due and owing by a purchaser of real property constructed pursuant to a financial agreement containing a long term tax exemption and supplementing P.L.1991, c.431 (C.40A:20-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Prior to the execution of the agreement of sale of a parcel of real property constructed using a long-term tax exemption pursuant to the Long Term Tax Exemption Law, P.L.1991, c.431 (C.40A:20-1 et seq.) and subject to the attorney review which, as applicable, may be required to precede the final execution of the contract for sale of real estate, the seller of the parcel of real property shall provide to a prospective purchaser of such a parcel of real property who is one or more individuals, a detailed, written document explaining the payment in lieu of property tax required to be paid by the purchaser of such a property pursuant to an agreement between the municipality and the urban renewal entity that developed the real property. The document shall inform the prospective purchaser about how the payment in lieu of property tax shall be calculated, the length of the term of the agreement requiring the payment in lieu of property tax to be made, and whether making a payment in lieu of property taxes on the parcel of real property shall affect the prospective purchasers ability to qualify for assistance from State property tax relief programs.
The prospective purchaser shall review the document required in this section and shall sign and date the document, which shall be returned to the seller of the parcel of real property after the conclusion of an attorney review, if applicable. If there is no attorney review, the signed document shall be returned to the seller along with the executed contract of sale. The prospective purchaser shall retain a signed and dated copy of the document.
The information required to be provided in the document shall be provided by the municipality to the seller, at the expense of the seller, from the agreement entered into between the municipality and the urban renewal entity. If the prospective sale of the parcel of real property is between a seller who is not the urban renewal entity and a prospective purchaser, the information required to be provided in the document shall also be provided by the municipality to the seller, at the expense of the seller, from the agreement entered into between the municipality and the urban renewal entity.
As used in this section, seller shall mean an urban renewal entity, if the property is newly constructed, or the person who owns the property.
2. This act shall take effect immediately.
STATEMENT
This bill requires the seller of certain real property to disclose to a prospective purchaser of the property, information concerning payments in lieu of property taxes (PILOTs) required to be made by the owner to the municipality in which the property is located. Under the bill, prior to the execution of the agreement of sale of a parcel of real property constructed using a long-term tax exemption pursuant to the Long Term Tax Exemption Law, P.L.1991, c.431 (C.40A:20-1 et seq.) and subject to attorney review, as applicable, the seller of the parcel of real property is required to provide to a prospective purchaser a detailed, written document explaining the PILOT payment required to be paid by the purchaser pursuant to an agreement between the municipality and the urban renewal entity that developed the real property. The document is required to inform the prospective purchaser about how the PILOT payment is calculated, the length of the term of the agreement requiring the PILOT payment to be made, and whether making a PILOT payment instead of paying property taxes would affect the prospective purchasers ability to qualify for assistance from State property tax relief programs.
The provisions of this bill are intended to inform prospective purchasers of the effects of purchasing real property constructed pursuant to the Long Term Tax Exemption Law. Under this law, a developer enters into a financial agreement with a municipality to develop the property. Properties developed under the law are property-tax exempt and are instead subject to a financial agreement the municipality enters into with the developer for a payment in lieu of property tax. This distinction is important because since the purchasers of these homes do not pay property taxes, they may be ineligible for State property tax relief programs, including the $250 veterans property tax deduction, the veterans property tax exemption provided to veterans having a 100 percent service-connected disability, the $250 property tax deduction for income-limited senior citizens and persons with disabilities, the homestead property tax reimbursement (colloquially, the senior freeze), and the ANCHOR rebate. The sponsor believes that purchasers of these properties should be made aware, prior to the purchase of such a property, that they may be ineligible for these property tax benefits provided by the State of New Jersey.