Author Topic: Has anyone reached FI in New Jersey?  (Read 1728 times)

Icecreamarsenal

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Has anyone reached FI in New Jersey?
« on: July 31, 2021, 07:34:41 PM »
Property taxes on my paid off $600k house are approaching $15k/yr.  Using the 25x rule this will require 375k just to cover the property taxes.
We're here because of the usual reasons: fear of moving into the unknown, setting up new social structures, friends, Manhattan is across the river, family is around for our kiddos.
I hear stories of far off places like North Carolina, where taxes are $2k/yr for a $500k house...
Is anyone else FI in NJ?

CheapScholar

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Re: Has anyone reached FI in New Jersey?
« Reply #1 on: August 01, 2021, 07:41:01 AM »
This is why I left Illinois. Property taxes were just insane. I know plenty of people there paying $12,000 per year or more. I moved to Indiana, bought a comparable house, and pay under $2,000. And it’s not like I was getting “more” in Illinois - the school district for my house in IN is 10/10 and very good.

Bottom line, property taxes can make or break FIRE sometimes. I’ll probably move once more before I retire, and property taxes will be one of the biggest factors as far as where.

American GenX

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Re: Has anyone reached FI in New Jersey?
« Reply #2 on: August 01, 2021, 10:13:07 AM »
This is why I left Illinois. Property taxes were just insane.

Yeah, Illinois is among the top states in people leaving due to state income tax increases, fees increasing, very high property taxes, and a high minimum wage increasing each year driving up the cost of everything on top of already increasing inflation.  Even the gas tax was increased and being indexed to keep going up.
« Last Edit: August 01, 2021, 10:18:26 AM by American GenX »

TheFrenchCat

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Re: Has anyone reached FI in New Jersey?
« Reply #3 on: August 01, 2021, 10:15:32 AM »
My grandparents were, but my grandpa had a very high paying job and it took till he was 55.  I think their property taxes were around $10k, though their house was pretty big.  And I'm pretty sure he has multiple millions.  So they weren't exactly mustachians, but they were relatively frugal and splurged where it was important to them. 

But yeah, I think he'd tell you it's harder to do in NJ.  He eventually followed my aunt to another state and I think even with renting a fancy apartment, his housing expenses went down. 

Is a less expensive house an option?  Not right away of course, since it seems like houses everywhere in NJ are crazy high right now.  My dad's in NJ and I don't think his property taxes are too bad, but he only spent about $200k for his house.  So is keeping the area but downsizing the house an option?

2sk22

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Re: Has anyone reached FI in New Jersey?
« Reply #4 on: August 01, 2021, 12:28:22 PM »
We are FI in NJ and live close to NY City in an inner suburb. I'm retired but wife is still working. However, we are planning to stay put even after she retires. No doubt its a lot more expensive than other places but I will admit that we are in a fortunate position of being able to comfortably afford to live here. We like our neighborhood, we like our neighbors, being close to the city, excellent medical care and having good air connectivity. After over twenty years in the same house, we have sorted out the main problems.

Dave1442397

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Re: Has anyone reached FI in New Jersey?
« Reply #5 on: August 01, 2021, 03:49:45 PM »
We plan to get out of NJ once we retire. I see no reason to deal with the property taxes (currently $12k) and the traffic. I want to go out west, but exactly where hasn't been decided yet.

clarkfan1979

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Re: Has anyone reached FI in New Jersey?
« Reply #6 on: August 01, 2021, 05:17:39 PM »
My dad left Lake County, IL (Chicagoland) and moved to FL when he retired. In 2006 he sold his 450K house and property taxes were $12,000/year.

One of my friends just got a deal on a fixer. Price of the house was 415K and taxes are $20,300. One of my childhood homes sold for 140K in 2012 and at the time, the property taxes were $7850/year.

All of my friends that live in Chicago struggle with paying the high taxes. No one is close to fire.

If you want low property taxes go to Hawaii or Colorado.

Icecreamarsenal

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Re: Has anyone reached FI in New Jersey?
« Reply #7 on: August 01, 2021, 06:43:50 PM »
I had no idea Illinois was that bad. Seems almost as bad as NJ, which usually ranks first (or last) on the lists for property taxes.
I work with people that pay north of $50k/yr on their homes.
Montclair, Chatham.

zoro

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Re: Has anyone reached FI in New Jersey?
« Reply #8 on: August 01, 2021, 10:03:06 PM »
yes fi and retired in NJ in my 40;s!
Taxes suck - they can be appealed. Done it twice and won both appeals - but basically having 400k in the bank to cover them over life is my plan.
If you get your income low enough, there are relief arrangements to apply for too.

Goodluck

clarkfan1979

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Re: Has anyone reached FI in New Jersey?
« Reply #9 on: August 02, 2021, 06:03:29 AM »
I had no idea Illinois was that bad. Seems almost as bad as NJ, which usually ranks first (or last) on the lists for property taxes.
I work with people that pay north of $50k/yr on their homes.
Montclair, Chatham.

NJ is typically #1 worst. Chicagoland is typically a very close #2.

I grew up in Lake County, IL, which is really bad. I grew up in Mundelein. My friends live in Mundelein, Gurnee, Libertville, Grayslake. I don't know the exact formula to calculate property taxes, but it's corrupt.

When you have a more expensive home, you pay a lower percentage in property taxes. Houses that are over 1 million will pay around 1.5%. When you are at the median, you are around 3%.

Lake Forest has the lowest property taxes (as a percentage of house value). They have the most expensive houses.

One of my friends sold his house about 18 months ago. I think he bought for 300K and sold for 365K. I think he owned it for about 4 years. In his neighborhood, there are two different types of floor plans. Medium size house (1,800 sq. ft.) and big house (2,400 sq. ft.). The taxes for the medium houses are typically 12K and the big houses are 16K. His medium size house had taxes for 10K, which is really low for the area. He got a deal on the house when he bought. Based on the lower than average purchase price, he was able to appeal and get his taxes lowered from 12K to 10K.

When he sold, his house sold for 10K more than the big houses. It should normally be 30K less. The person who bought was thinking that they would rather pay 10K/year in taxes than 16K/year, which makes sense. However, based on the new purchase price their taxes will probably adjust/increase to 13K. 

GodlessCommie

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Re: Has anyone reached FI in New Jersey?
« Reply #10 on: August 02, 2021, 07:10:37 AM »
I grew up in Lake County, IL, which is really bad. I grew up in Mundelein. My friends live in Mundelein, Gurnee, Libertville, Grayslake. I don't know the exact formula to calculate property taxes, but it's corrupt.

When you have a more expensive home, you pay a lower percentage in property taxes. Houses that are over 1 million will pay around 1.5%. When you are at the median, you are around 3%.

Local elections - least attention, most impact on one's life.

kite

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Re: Has anyone reached FI in New Jersey?
« Reply #11 on: August 02, 2021, 08:01:55 AM »
I'm in NJ.  My property taxes are about a third of that.
My house is modest.  We bought a 'starter' home of under 800 square feet when we were young 20-somethings.  And now that we're middle-aged, it's the perfect 'down-size' property. Cheap to heat & cool, everything on one level.  Short walk from bedroom to coffee pot. 
We don't need a fully accessible home yet, but seeing what has happened as family aged and became more frail, we are going to make a few tweaks to make our place even more accessible and low maintenance so we can age in place.  Part of what goes into the 'independence' part of FIRE equation for me is the physical bit.  Not just being able to financially afford my home, but to be able to physically maintain it. This means smaller.  Smaller is cheaper.






wageslave23

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Re: Has anyone reached FI in New Jersey?
« Reply #12 on: August 11, 2021, 01:27:48 PM »
I had no idea Illinois was that bad. Seems almost as bad as NJ, which usually ranks first (or last) on the lists for property taxes.
I work with people that pay north of $50k/yr on their homes.
Montclair, Chatham.

NJ is typically #1 worst. Chicagoland is typically a very close #2.

I grew up in Lake County, IL, which is really bad. I grew up in Mundelein. My friends live in Mundelein, Gurnee, Libertville, Grayslake. I don't know the exact formula to calculate property taxes, but it's corrupt.

When you have a more expensive home, you pay a lower percentage in property taxes. Houses that are over 1 million will pay around 1.5%. When you are at the median, you are around 3%.

Lake Forest has the lowest property taxes (as a percentage of house value). They have the most expensive houses.

One of my friends sold his house about 18 months ago. I think he bought for 300K and sold for 365K. I think he owned it for about 4 years. In his neighborhood, there are two different types of floor plans. Medium size house (1,800 sq. ft.) and big house (2,400 sq. ft.). The taxes for the medium houses are typically 12K and the big houses are 16K. His medium size house had taxes for 10K, which is really low for the area. He got a deal on the house when he bought. Based on the lower than average purchase price, he was able to appeal and get his taxes lowered from 12K to 10K.

When he sold, his house sold for 10K more than the big houses. It should normally be 30K less. The person who bought was thinking that they would rather pay 10K/year in taxes than 16K/year, which makes sense. However, based on the new purchase price their taxes will probably adjust/increase to 13K.

I can corroborate, my taxes are "only" $6700 but its a pretty modest house, most decent houses are $10k+.  We may move after I "retire" to a lower cost state like TN or FL.   But I have to balance that with my wife still probably working part time and she makes about 50% more here than in other areas.  And also IL is a medicaid expansion state, so if we end up under 400% of the poverty level in FIRE then we qualify for medicaid here vs. no subsidy at all in most of the southeastern "cheap" states.  Then there is family to consider and we also own a few rental homes that cash flow well and offset the higher property taxes.  Suffice it to say, there are a lot of factors to consider when deciding to move out of state.