Bill > A5317

Introduced Session

This bill allows New Jersey seniors, 65 years of age and older, whose annual household income, for federal tax purposes, is under $50,000 to also qualify for an annual deferral of property tax payments. Deferral eligibility is further limited to persons whose primary residence does not have a reverse mortgage, and has a value of under $500,000. A senior eligible for a deferral, or a person acting on behalf of the senior, would file an application with the tax collector of the municipality in which the residence is located by April 1 of the year preceding the tax year that the deferral would cover, and submit any documentation required to ascertain that the applicant qualifies for the deferral. The amount of an annual deferral cannot exceed 110 percent of the taxes assessed and levied on the residence for the preceding year, as adjusted to incorporate any rebates, credits, deductions, or exemptions that are not received later, but incorporated into the property tax bill itself. Deferral payments will not be permitted beyond 75 percent of a home's equity. Receipt of a deferral will not limit the amount that may later be received through the homestead property tax reimbursement program, P.L.1997, c.348 (C.54:4-8.67 et al.). Interest will accrue on deferred payments at a rate of nine percent, which is one half of the maximum rate permissible for delinquent taxes pursuant to R.S.54:4-67. However, the Director of the Division of Taxation will have discretion to annually alter this rate by as much as four percentage points higher or lower in response to mortgage rate trends. Deferral payments shall become due upon the death of the senior, the conveyance of the property, upon entrance into any reverse mortgage agreement, or if the home ceases to be the primary residence of the eligible senior for reasons other than health complications. A spouse of a deceased senior of age 55 or older will be able to continue the property's deferred status, subject to the 75 percent equity limit. In order to avoid an unfunded mandate, this bill requires that the State annually pay each municipality for the deferrals that eligible senior residents have applied for. The tax collector is required to reimburse the State, including all interest accrued for each deferral, upon receipt of the payment deferred from each eligible senior. At the time of this return payment, the tax collector's office is permitted to keep up to $25 per annual deferral granted, in order to account for any administrative costs incurred. In other words, if a senior receives a deferral each year for four years, the tax collector would be entitled to keep as much as $100 in administrative expenses when that deferral is fully repaid to the State. Refund payments to the State shall be deposited into the "Senior Citizens Property Tax Deferral Fund," a revolving fund to be established in the Department of the Treasury. If the State limits the amount of funding dedicated to property tax deferral reimbursement payments for any year through the annual appropriations act, and revolving fund monies are insufficient for all applications, then the amount annually paid from the State to each municipality will be allocated proportionally to the amount that eligible seniors within each municipality have applied and qualified for. Each municipal tax collector would then award tax deferrals to seniors with priority going first to those who received a deferral in the previous year, and next to the earliest applications. Misrepresenting eligibility could constitute a crime of the fourth degree, or a disorderly persons offense, depending on whether the misrepresentation was intentional or only negligent. The bill directs the Division of Taxation to adopt regulations to implement the program, and biennially report on the utilization of the program.

Committee Categories

Daniel Benson (D)*,  R. Bruce Land (D)*,  Matthew Milam (D)*, 

Introduced, Referred to Assembly State and Local Government Committee (on 05/13/2019)