Patrick Rumore - The NJ Homeowner’s Guide to Lower Taxes and Better Living

The NJ Homeowner’s Guide to Lower Taxes and Better Living

The NJ Homeowner’s Guide wner’s Guide to Lower Taxes and Bett es and Better Living

Patrick Rumore

Table Of Contents

Introduction

THE HIDDEN COST OF PROPERTY TAXES IN NEW JERSEY 6

UNDERSTANDING NEW JERSEY’S PROPERTY TAX LANDSCAPE

THE SALT DEDUCTION CHANGE AND WHAT IT MEANS FOR YOU

HOW LOWER TAXES LET YOU BUY MORE HOUSE FOR THE SAME MONTHLY COST 24

THE LONG TERM WEALTH IMPACT OF CHOOSING THE RIGHT TOWN

WHAT HIGHER INCOME BUYERS ACTUALLY LOOK FOR IN NEW JERSEY

HOW TO STRATEGICALLY SELL YOUR CURRENT HOME IN A HIGH TAX TOWN 36

CHOOSING THE RIGHT LOWER TAX TOWN: A FRAMEWORK THAT ACTUALLY WORKS 40

10. SCENARIOS THAT SHOW HOW THIS MOVE CAN COMPLETELY CHANGE YOUR NUMBERS AND YOUR LIFE 11. YOUR ROADMAP TO MAKING THE MOVE (AND WHY THE RIGHT REALTOR MATTERS FOR EVERY STEP THAT FOLLOWS)

12. (BONUS CHAPTER 1) PAYING CASH VS

GETTING A MORTGAGE: WHAT MAKES THE MOST SENSE FOR YOU

13. (BONUS CHAPTER 2) TURNING YOUR TAX SAVINGS INTO REAL PROGRESS INSTEAD OF “DISAPPEARING MONEY”

Forward There is a moment every homeowner experiences at some point in their life. It is not loud or dramatic. It usually arrives quietly, like a small tap on the shoulder. You open your tax bill, or you see a new assessment, or you overhear a conversation in town, and something inside you says, “Is this really what I should be paying.” For years, many New Jersey homeowners simply accepted high property taxes as a fact of life. It was part of living here, the price of good schools or proximity to New York City or the charm of older neighborhoods. But over time, the smart people began asking deeper questions. They started comparing towns, exploring different pockets of the state, and discovering that not all property taxes in New Jersey are created equal.

And that is where this book comes in.

This is not a book about leaving New Jersey. I love New Jersey! It is a book about living smarter within it. New Jersey is a complex patchwork of municipalities, each with its own tax structure, character, lifestyle, and opportunities. Some towns have undeniably high taxes. Others offer incredible value. Many people never see the options available to them because no one ever shows them how, or where, to look. Patrick Rumore, a New Jersey Real Estate agent, has created something rare in today’s real estate world: a guide that speaks directly to the everyday New Jersey homeowner. Not with jargon or pressure, but with clarity, practicality, and genuine care. What makes this book especially valuable is its mindset. It respects the reader. It empowers without overwhelming. It teaches without lecturing. It invites curiosity instead of fear.

Patrick writes the way he speaks: conversational, down to earth, and focused on helping people make choices that support both their finances and their lifestyle. He does not claim to be a tax professional or financial advisor, and he does not need to. His strength is in connecting the dots between numbers, neighborhoods, and long term life goals. This is the kind of book you read once, think about for a while, then read again with a pen in hand. It will challenge assumptions you may have held for years. It may open your eyes to new towns, new ways of thinking, and new paths forward. Most importantly, it gives you the space to do your own homework first. When the time comes to act, you will be better prepared, more confident, and far more informed. Whether you are dreaming of more space, planning for the future, reducing financial stress, or simply curious about what else is possible, this book is a practical companion. New Jersey is a state full of opportunity. Sometimes, all it takes is learning how to look at it through a different lens. This book is that lens. ~The Publisher Disclaimer: This book is for educational and informational purposes only. It is designed to help you think about property taxes, town selection, and real estate decisions in a more strategic way. It is not financial, tax, legal, or investment advice. All examples, figures, scenarios, charts, and comparisons in this book are simplified and approximate. Property taxes vary by town, by property, by assessment changes, and by year. Home prices vary based on condition, location, upgrades, market conditions, and many other factors. Mortgage qualification and monthly payment estimates depend on interest rates, loan products, credit scores, debt to income ratios, lender guidelines, and other underwriting criteria.

The SALT (state and local tax) deduction examples are general in nature. The actual tax treatment of property taxes, state income taxes, and other deductions depends on your personal situation, your filing status, current tax law, and the interpretation of your tax advisor. You should consult a qualified tax professional, certified public accountant, or financial advisor before making any tax related decisions. I am a Realtor, not a tax professional or investment advisor. I can help you understand real estate markets, compare towns and neighborhoods, evaluate property options, and navigate the process of buying and selling homes. I cannot and do not provide tax, legal, or investment advice. Before you make any major financial decision, including buying or selling a home or relocating to a different town (or state) for By reading this book, you acknowledge that the author and publisher assume no liability for actions taken or decisions made based on the information provided. Use this book as a guide. Rely on qualified professionals for advice tailored to your specific circumstances. This publication is a personal project authored by me, Patrick Rumore, New Jersey Realtor. It is not affiliated with, endorsed by, or officially represent any brokerage or association I belong to, or are a member of, past or present. Any opinions expressed in this book are mine alone at the time of the writing of this book. tax reasons, you should consult with: • A licensed tax professional or CPA • A mortgage professional • A financial advisor • An attorney, if appropriate

vii

About me... Hi! I'm Patrick Rumore, New Jersey Real Estate Agent. When I'm not busy landing deals for my clients, you can probably find me at a concert enjoying live music. Live music is how I like to unwind after a long week working hard for my clients - and that’s not just a cop-out. I have dedicated my life to helping my clients achieve their real estate goals. I was born and raised in New Jersey, and have lived in several areas of the New Jersey over my lifetime. I was taught from a young age that if you want something in life, you have to work for it. So that’s what I did. And I worked hard. (But that’s not to say I didn’t have fun along the way.) I got into the real estate profession after purchasing a couple homes, and I wasn't satisfied with the process, or maybe better yet, the 'follow-up'. After I purchased my houses, and the agents made their commission, I never heard from the agents again. I felt like a 'transaction'. I knew my agents were knowledgeable and worked hard, but thought they might 'check-in' to see how things were after my new (major) purchases. I haven't heard from any of them since! I knew there was a better way. Buying or selling a home is a major decision. And I know you have a choice of agents to work with. So I set out to set myself apart form other agents. I didn't want my clients to feel like a 'transaction'. I wanted to make them feel like family. So when you become one of my clients, you become 'family'! I aim to provide the highest level of service to my clients and I take deep pride in helping them achieve their real estate goals. I work with homeowners, buyers, and investors across a wide range of New Jersey towns, with a special focus on helping people think more strategically about where they live, how much

they pay in property taxes, and how that affects the rest of their financial life. Over time, I noticed the same pattern in many conversations. People would say, “It is New Jersey, taxes are high, what can you do.” But when we looked at the numbers together, it became clear that not all towns are the same. Some areas offer much better value for the money, with lower property taxes, strong school districts, great neighborhoods, and very solid long term appreciation.

That realization is what inspired this book.

I enjoy helping people see options they did not know they had. Sometimes that means staying where they are and feeling more confident about it. Other times it means relocating to a different town that better matches their goals, lifestyle, and financial comfort zone. If you have read this far, you are already doing more than most homeowners ever do. You are thinking ahead. You are asking questions. You are doing your homework. When you reach the point where you want to turn ideas into a real plan, I would be happy to talk with you and explore your options.

You can reach me at: Website: www.thinkofpatrick.com Phone: 973-666-0365 Email: thinkofpatrick@gmail.com

When you think of buying, selling or investing in real estate, think of Patrick.

www.thinkofpatrick.com

CHAPTER 1 Introduction Looking at New Jersey Through a New Lens

Most people who grow up in New Jersey or have lived here for a long time learn to just accept a few things as facts of life. We accept traffic on the Parkway. We accept full diners at all hours of the day (before Covid). We accept that the jughandle was invented by someone who clearly wanted to confuse future generations (and out of state drivers). And we accept that property taxes are high. (But we no longer have to, we have options, that's why I wrote this book) I talk to homeowners every single week who shrug and say some version of the same sentence. “It's New Jersey. Taxes are high. What can you do. It is what it is” But the truth is that New Jersey is not one uniform tax environment. Not even close. It is a patchwork of completely different financial ecosystems, each of them operating under its own set of rules, budgets, and priorities. Many people do not realize just how dramatic the differences really are until they look closely. Two towns separated by a ten to twenty minute drive can differ by fifteen thousand dollars or more in yearly property taxes. A homeowner who feels stuck with a thirty thousand dollar annual tax bill might be shocked to learn that an equally desirable town nearby could offer similar or even better amenities for twenty thousand a year. The problem is that most people never compare. They simply adapt. Human beings can get used to anything if we live with it long enough.

I've had conversations where a homeowner tells me they pay thirty five thousand dollars in annual property taxes in the same tone someone else might use to tell me they spent twenty dollars on lunch. They have lived with it for so long that it feels normal . That does not mean it is financially healthy. This book is meant to help you zoom out and see the long term picture more clearly. Not just the tax bill itself, but what that bill represents. What you gain. What you lose. What opportunities you might not even realize you have. New Jersey is a state filled with variety. There are places where taxes are undeniably high, but there are also places where the taxes are actually very reasonable relative to the home values, schools, amenities, and overall lifestyle. My goal is not to convince you to move. My goal is to give you enough information so that you can make a fully informed decision about where you want your money and your future to go. You might stay exactly where you are. You might decide that your town is worth every penny. But you might also discover that a ten minute drive east, west, north, or south could completely change your financial life. What you choose to do with that information is always up to you. I simply want you to have the clarity that most people never get because no one ever laid it out in a way that made sense. I also want this to feel like a conversation rather than a lecture. When I speak with clients, I try to make things simple, visual, and relatable. I use examples. I tell stories. I break things down because real estate should not feel mysterious or overwhelming. It should feel empowering. So, as you go through this book, I invite you to treat it like a guide, but also like a personal conversation. Take your time with the numbers. Pause and think about what they mean for you

and your future. Ask yourself questions. Do your own homework. See what the real possibilities look like.

And when you reach the point where you want to explore your options in a meaningful way, I can help you move forward. But the first steps belong to you, because no one understands your goals, priorities, and dreams better than you do. Now let us look at the true cost of property taxes and what they mean over time.

CHAPTER 2 THE HIDDEN COST OF PROPERTY TAXES IN NEW JERSEY When I sit down with homeowners and ask them what they pay in property taxes, they usually say it casually. “Twenty eight thousand.” “Thirty two thousand.” “About thirty five.” Their tone tells me they have grown used to it. After all, they have been paying it for years. But accepting something does not make it harmless. In my experience, most homeowners have never really calculated the long term cost of those taxes. Not just year to year, but decade to decade. And that is where the real shock usually comes in. Why Property Taxes Are Different From Other Costs A mortgage eventually disappears. Insurance fluctuates. Utilities go up and down depending on usage. Property taxes, on the other hand, almost always rise over time. They do not build equity. They do not improve your home. They are not an investment. They are an ongoing withdrawal from your household income. Think about it like this. If someone told you that you were putting thirty thousand dollars a year into a retirement account, you would immediately ask how it grows, what the interest rate is, what the long term projection looks like. You would analyze it because it is your money. But thirty thousand dollars in taxes disappears the moment you send the check. It does not grow. It does not compound. It does not become an asset. It simply goes away. Poof! Gone. 6

And yet, because we are used to taxes, we rarely ask the same questions we would ask if that same amount were going into a savings account. A Realistic Example of Long Term Loss Imagine two homeowners. Same income. Same lifestyle. Same size home. Same goals for the future. Homeowner A lives in a town where taxes are 30k per year. Homeowner B lives in a comparable town where taxes are 18k per year. Both homes might be beautiful. Both towns might be wonderful. But the difference in yearly tax burden is $12,000.00 or $1000.00/month.

Now multiply that by time.

$12,000.00 Times 10 years $120,000.00

Times 15 years Equals $180,000.00

Times 20 years Equals $240,000.00 (Just shy of 1/4 million dollars)

This is money that could have been used for: • Paying down the mortgage faster

• Renovating the home • Investing in retirement • College savings • A second property

• Travel and experiences • Gifts to charities • New cars or boats • Or simply creating more financial breathing room

Instead, it is gone.

A Simple Chart to Visualize the Loss Below is a text based chart that makes these differences clear. Real numbers will vary based on tax year, reassessments, local budgets, and changes in your town. 20 Years ----------------------------------------------------------------------- $8,000 $80,000 $120,000 $160,000 $10,000 $100,000 $150,000 $200,000 $12,000 $120,000 $180,000 $240,000 $15,000 $150,000 $225,000 $300,000 $20,000 $200,000 $300,000 $400,000 Yearly Tax Difference 10 Years 15 Years Even the smallest differences become staggering over time. And these numbers do not even include what that money could have grown into if invested. They are simply the raw totals. When homeowners see this written out, they often pause. Sometimes they get quiet. Sometimes I can tell they are replaying the last ten or twenty years in their mind. Sometimes they ask me to run these numbers for their own town versus a town they have always liked but assumed was out of reach.

I always remind them the same thing. This is not meant to cause regret. This is meant to provide clarity for the future.

How New Jersey Creates These Differences New Jersey is a state filled with variation. Each town funds its

schools differently. Some rely heavily on residential taxes. Others benefit from commercial zones that offset the burden. Towns like Paramus are able to levy significant tax revenue from malls, shopping centers, and businesses. Towns like Maplewood, Montclair, or Glen Ridge rely more on residential contributions because commercial land is limited. Infrastructure age also matters. Older towns might require more spending on maintenance and upgrades. Debt levels differ. Population density matters. School enrollment matters. County obligations matter. Everything adds up. The result is that two towns with similar home values can have completely different tax burdens. A Few Real NJ Style Comparisons Please note: These numbers are not exact because markets and rates change every year, but the patterns are very consistent. West Orange vs Paramus A million dollar home in West Orange might carry taxes between $28k and $32k. A million dollar home in Paramus might be around $17k to $20k.

Difference: roughly $8k-$12k per year.

Maplewood vs Upper Saddle River A $1.2 million home in Maplewood might be taxed in the $32k- $35k range (or more)

Upper Saddle River could be closer to 18k-24k Difference: $12k+

Glen Ridge vs Mahwah

Glen Ridge often sees taxes in the mid $30K for certain homes.

Mahwah might offer similar sized homes for $16k-$20k. Difference: $15k+/year.

Again, these are broad examples. Your homework will be to check the towns you personally feel drawn to. But these patterns repeat over and over throughout the state. Monthly Impact on Buying Power Most homeowners think of taxes in yearly chunks, but lenders calculate affordability monthly. A $1,000.00 less in taxes per month could increase your buying power by well over $150,000.00 depending on interest rate, credit profile, and loan terms. Here is a simple illustration. These are estimates only. Your results will vary based on your credit score, loan type, down payment, lender guidelines, and current rates. Additional Buying Power Approx. -------------------------------------------------------------------- $500 $75,000 to $90,000 $750 $110,000 to $140,000 $1,000 $150,000 to $190,000 $1,250 $185,000 to $230,000 $1,500 $225,000 to $275,000 Monthly Savings This means: • Lower taxes can help you move to a better town without raising your monthly cost. • Lower taxes can allow you to buy a larger home with the same payment. • Lower taxes can free up money for renovations or updates. • Lower taxes can simply reduce stress.

Monthly breathing room changes how people live. I have seen that firsthand. Why Homeowners Rarely Question Their Taxes There is an interesting thing that happens to human beings. Once we accept something as normal, we tend to stop analyzing it. If you have paid twenty eight or thirty thousand in taxes for ten years, it becomes part of the fabric of life. You might not like it, but you stop questioning it. Imagine if you were asked right now to pay thirty thousand dollars a year for a subscription service. You would laugh. But that is exactly what many people pay without realizing the weight of it. You're paying an eternal 'subscription' to live in your current town. I am not saying it is wrong to stay in the town you love. Far from it. Some towns come with higher taxes but offer so much value that the tradeoff is worth it. What I am saying is that many people pay high taxes without ever exploring the alternatives. And that is why I wrote this book, to help you explore the alternatives. An Analogy That Helps Make This Clear Imagine you went to a restaurant you have always loved. You sit down and order your usual. You get the bill, and it is $85.00. You shrug and pay it. The next week you try a new restaurant that you had never considered before. The food is better, the service is better, and strangely enough, the total is $60.00. If those restaurants were next to each other, you would think carefully before going back to the first one. But if the cheaper restaurant were ten minutes away, you might never have tried it unless someone specifically pointed it out.

Property taxes work the same way. We get used to our restaurant. We stop trying new ones. We do not always see the alternatives. Why This Chapter Matters This chapter is not about pushing you to move. This chapter is about giving you a new framework for looking at your financial life. When you evaluate your tax burden through a ten or twenty year lens instead of a one year lens, the picture changes dramatically. Once you see the larger pattern, it becomes almost impossible to unsee it. That is why many homeowners start to explore nearby low tax towns out of curiosity. They begin doing their own homework. They look at listings. They compare taxes. They calculate differences. They look at the savings. They think of the potential. They call me to help them. (Yes, a shameless plug!) If you choose to do that, this book will guide you on what to look for, how to compare towns, how to understand the numbers, and how to evaluate values and tradeoffs. And when you reach the point where you want to explore the move seriously, that is where I can help. I can guide you through the entire process of selling your current home and finding a town that fits your lifestyle, your goals, and your long term financial plan. (And yes, as a full time REALTOR, I understand moving can be stressful and a big pain, but moving is an 'event.' Living in, and enjoying your new home and tax savings is well worth the 'bumpy' part of the journey.) Your journey begins with awareness, and that is what this chapter was all about.

CHAPTER 3 UNDERSTANDING NEW JERSEY’S PROPERTY TAX LANDSCAPE When I first started helping homeowners compare towns, one of the biggest surprises for many of them was just how inconsistent property taxes are in New Jersey. People know taxes are high, but they often assume they are high everywhere. The truth is more complicated and also more hopeful. Once you understand Why Taxes Differ So Much From Town to Town New Jersey’s property tax system is built on a simple but powerful reality: most of the money that funds schools, municipal services, and certain county responsibilities comes directly from property taxes. But how much each individual homeowner pays depends on the decisions made by their specific town. If a town needs a lot of revenue and does not have much commercial property, the burden falls on homeowners. If a town has a strong commercial base, homeowners often enjoy much lower property taxes. how the state’s tax structure works, you start seeing opportunities you may have never noticed before. This is why towns like Paramus, with its massive shopping district, have taxes that are surprisingly low compared to their home values. Meanwhile, a town like Maplewood, beautiful and popular but with limited commercial areas, relies more heavily on residential taxes to support its services, schools, infrastructure, and community programs.

New Jersey Is Really a State of 500 Micro-Economies New Jersey has 564 municipalities. That means 564 different budgets, 564 different school systems or school funding obligations, and 564 different sets of priorities. Each town chooses: • How much money it needs • How to balance its budget • How much commercial property tax revenue it has • How much residential burden it will require A town that needs fifty million dollars a year to run its schools and services but only has a small commercial tax base might put the majority of that burden on homeowners. Another town might need the same fifty million dollars but receive half of it from malls, office parks, or industrial zones. This is why two homeowners with similarly priced homes can have tax bills that differ by ten to fifteen thousand dollars per year. The Role of Schools and Community Services Schools represent the largest part of property taxes in most towns. If a district is known for excellent schools, families are willing to pay a premium to live there. But here is where things get interesting: some of New Jersey’s best school districts are located in towns with moderate taxes because they have managed their budgets well or benefit from strong commercial contributions. Meanwhile, some districts with very high taxes are not necessarily outperforming others academically. This is where doing your homework becomes powerful. You might discover a town with great schools, lower taxes, and the same or better home values than where you currently live.

Infrastructure and Age of the Town Older towns often have older roads, older sewer systems, older municipal buildings, and older schools. Maintenance costs rise over time. If the town does not have outside revenue sources, taxes can rise significantly to cover ongoing needs. On the other hand, towns that developed more recently often have modern infrastructure, well planned layouts, newer schools, and lower maintenance costs. This does not mean older towns are bad. Some are beautiful, historic, walkable, and extremely desirable. But their charm sometimes comes with higher taxes because upkeep requires money. Effective Tax Rate vs Total Tax Amount One of the most misunderstood concepts in New Jersey is the difference between the total tax bill and the effective tax rate. Most homeowners compare taxes on paper. “This home is twenty eight thousand in taxes. That home is eighteen thousand.” But this does not tell the whole story. The Effective Tax Rate (ETR) looks at taxes as a percentage of the home’s market value (as opposed to the general tax rate) (Some needed definitions: General Tax Rate is the official number used to print your annual bill, the General Tax Rate x Your Home's Assessed Value = Your Tax Bill. The Effective Tax Rate is the only reliable metric for a fair, apples-to-apples comparison when shopping for homes in different towns. Use the General Tax Rate to calculate the specific, current bill for a property after you've decided on a town. Use the Effective Tax Rate to compare the tax burdens of different towns before buying.)

Formula:

Effective Tax Rate = Annual Taxes / Market Value of Home

This matters because a home with a higher price but lower effective tax rate can be a much better long term investment than a cheaper home with a high effective tax rate. Let me give you an example. These numbers are hypothetical but realistic.

Town A Home value: 1,000,000 Taxes: 30,000 Effective tax rate: 3 percent Town B Home value: 1,000,000 Taxes: 18,000 Effective tax rate: 1.8 percent

The difference in effective tax rate is huge. It tells you that Town B has a far stronger relationship between taxes and home values.

This often signals: • Strong demand • Healthy municipal budgeting • Good schools • Attractive lifestyle features • Long term appreciation potential

Comparing Some Real New Jersey Patterns Please note: These are not exact numbers. They shift yearly. But the patterns are consistent.

Paramus Taxes: Moderate Home prices: High Value: Excellent

Why: Massive commercial base

Upper Saddle River Taxes: Moderate to high Home prices: High Value: Strong Why: Great schools, large lots, stable population, strong demand Mahwah Taxes: Often moderate Home prices: Moderate to high Value: Very strong Why: Balanced tax structure, diverse types of housing, strong amenities Value: Strong if you love walkability, culture, and transit access Why: Older infrastructure, limited commercial revenue, high demand West Orange Taxes: High to moderate Home prices: Moderate to high Value: Mixed Why: Large town, older infrastructure, many neighborhoods with different profiles Maplewood, Montclair, Glen Ridge Taxes: High Home prices: High There is no “perfect town.” There is only the town that best fits your lifestyle priorities and financial goals. How This Affects Your Long Term Wealth Let us say you stay in a high tax town because you love it. If it is truly your ideal place to live and it supports your lifestyle, then your taxes may be worth paying because the non-financial

return is high.

But if your town is simply the place you settled in years ago and you have never revisited the numbers, you might be losing tens of thousands of dollars a year for no reason other than habit. When I work with homeowners who start comparing towns, a few thoughts always seem to pop up: • “How is it possible that the nicer town has lower taxes.” • “Wait… I can get more house and pay less every month.” Those reactions come not from sales pressure but from simple math. Your Homework (Light and Simple) I do not need to do this part for you. You are more than capable of checking these comparisons on your own. In fact, doing the homework yourself makes the insights much more powerful and personal. Consider comparing: • Your current town • One town you admire • One town you have never considered but have heard good things about • One town outside your immediate area • “I had no idea taxes varied this much.” • “Why have I never looked into this before.” Look at taxes, home values, and schools. Start with those three. That is enough to spark insight. And when you are ready to move forward, that is when I can help.

CHAPTER 4 THE SALT DEDUCTION CHANGE AND WHAT IT MEANS FOR YOU When the federal government capped the SALT (state and local tax) deduction at ten thousand dollars, New Jersey homeowners felt it more than almost anyone else in the country. It meant that no matter how much you paid in property taxes or state income taxes, the maximum you could deduct was ten thousand. For someone paying thirty thousand in property taxes, this capped their deduction significantly and reduced a key tax benefit of homeownership in a high tax state. Now that the SALT cap has increased to forty thousand dollars, many people think this change automatically makes high taxes less painful. The reality is more nuanced. (Please note: This higher cap is in effect for tax years 2025 through 2029. The cap amount will increase by 1% each year. The cap is scheduled to revert to the original $10,000 limit for all taxpayers starting in the 2030 tax year, unless Congress acts again. The full benefit of the $40,000 cap is limited for higher- income earners. The deduction begins to phase out for taxpayers with a modified adjusted gross income (MAGI) over $500,000 ($250,000 for married couples filing separately). For those with MAGI above $600,000, the deduction is limited to the original $10,000 cap.)

What SALT Actually Covers SALT includes: • Property taxes

• State income taxes • Certain local taxes

If your total of these three categories stays under forty thousand dollars, you may be able to deduct the full amount on your federal return if you itemize.

But here is where the nuance comes in.

Scenario A: Taxes Are High, but Still Under the Cap Let us say you pay:

• Thirty thousand in property taxes • Ten thousand in state income tax Total: Forty thousand

Under the new rules, you can theoretically deduct all of it if you itemize and if your other deductions and credits fall into place.

Scenario B: Taxes Exceed the Cap Now suppose you pay: • Forty five thousand in property taxes • Fifteen thousand in state income tax Total: Sixty thousand

You can still only deduct up to forty thousand. That means the remaining twenty thousand dollars in taxes provides no federal deduction benefit. If your taxes are extremely high, the SALT expansion helps, but it does not eliminate the burden.

Think of the SALT deduction as a potential discount on taxes.

Why Lower Taxes Still Matter Many homeowners initially think: “Great. The SALT deduction goes up. That means I can stay in

my current high tax town and it will all work out.”

But this ignores a fundamental reality. Even if your taxes are fully deductible, they are still leaving your pocket every year. Even if you get a tax break, money spent is money spent.

If you can move to a town where: • The taxes are lower • The schools are just as good or better • The lifestyle fits your goals • The appreciation potential is stronger

then the SALT change should not hold you back from making a decision that benefits your long term financial health. The Psychological Shift I have seen homeowners get excited about the SALT change because it feels like a relief. It creates permission to stay where they are. But relief is not the same as a good financial strategy. The SALT deduction is helpful. It is not a magic wand. And, may not be permanent. How the SALT Deduction Fits Into Your Homework As you compare towns, factor the SALT deduction into your thinking. It is a layer, not a deciding factor. It should not mask the long term cost of unnecessarily high property taxes. No one likes sending tens of thousands to the government each year. If you can reduce that amount by choosing a different town that still supports your lifestyle, why not explore the option. I Am Not a Tax Professional, but I Can Give You Frameworks Any tax related element in this book should be discussed with your accountant or financial planner. What I can help you with is understanding how the real estate side interacts with the financial side. When you are ready to run actual scenarios with your tax advisor, I can help you gather the property related data.

But the homework of understanding your tax picture starts with you. And when you are ready to take it further, I can guide the real estate piece with you.

CHAPTER 5 HOW LOWER TAXES LET YOU BUY MORE HOUSE FOR THE SAME MONTHLY COST This chapter is often the moment where things click for homeowners. Once you see how taxes influence monthly affordability, everything becomes clearer. Many people think that moving to a better town or a larger home will automatically cost more. But in New Jersey, that is not always the case. Sometimes, moving to a better town will cost you less. How Lenders Look at Monthly Payments When a lender evaluates your ability to buy a home, they look at your total monthly payment, not just your mortgage.

Your total cost includes: • Mortgage principal • Mortgage interest • Property taxes • Homeowner’s insurance • Condo or HOA fees if applicable

If a town has high taxes, your lender may approve you for a smaller mortgage because your monthly payment balloons when taxes are included. If a town has lower taxes, your monthly payment shrinks, increasing your buying power.

A Real Example of How This Plays Out Let us say you currently pay: • $30k per year in taxes • That is $2,500 per month 24

If you move to a town where taxes are: • $18k per year • That is $1,500 per month

You now have 1,000 dollars of monthly breathing room.

Depending on rates and loan products, that 1,000 dollars might translate into an extra: • $150k to $200k in buying power

Or it might simply mean: • Lower monthly payments • Less financial stress • More ability to save or invest

A Text Based Chart to Visualize Buying Power Please Note: These numbers are approximate. They depend on many factors including your credit score, interest rate, lender, loan type, debt to income ratio, and down payment. Additional Buying Power Approx. ----------------------------------------------------------------------- $400 $60,000 to $72,000 $600 $90,000 to $110,000 $800 $120,000 to $150,000 $1,000 $150,000 to $190,000 $1,200 $175,000 to $220,000 $1,500 $225,000 to $275,000 Monthly Savings This is one of the most powerful concepts in New Jersey real estate because it means you may not have to compromise on your lifestyle or your dream neighborhood. You may be able to get both.

A Story That Brings This to Life I once worked with a couple who lived in a beautiful but high tax town. They paid thirty four thousand dollars a year in taxes. They assumed this was unavoidable because they wanted good schools and a safe neighborhood. Out of curiosity, they started looking at homes in two nearby towns that they had always admired but thought were too expensive. When they compared taxes, they discovered that the homes they liked were in towns where taxes ranged between eighteen and twenty two thousand per year. The towns had excellent schools, beautiful streets, larger lots, and stronger long term appreciation potential. When they ran the monthly numbers, they realized something almost unbelievable. They could move to a bigger home, in a better neighborhood, with lower taxes and a lower total monthly payment. The only thing that held them back previously was a set of assumptions about affordability that turned out not to be true. You might discover the same thing when you do your own comparisons. Lifestyle Improvements That Do Not Raise Monthly Cost Lower taxes can open the door to: • A quieter neighborhood • More land • A larger house • A better school district • Updated kitchens and bathrooms • A finished basement • A newer construction home • More privacy and less congestion

Imagine trading constant financial pressure for more comfort and enjoyment without increasing your monthly cost. That shift alone can change how a person lives, thinks, sleeps, and plans. Lower Taxes Also Give You More Choices When your monthly costs are high, you feel locked in. You have fewer options. Financial stress narrows your possibilities. But when you lower your tax burden: • You feel more flexible • You feel more secure • You have more capacity to plan for the future • You are not as vulnerable to rising or unexpected expenses Lowering your taxes unlocks your life in subtle but powerful ways. Your Homework (The Eye Opening Part) You do not have to run complex spreadsheets. Just choose two or three towns that interest you and look at the typical taxes for homes you find appealing. You will likely discover at least one surprise. And when that happens, the gears start turning. Once you have a clearer idea of your possibilities, I can help you take the next step forward if you choose to pursue it.

CHAPTER 6 THE LONG TERM WEALTH IMPACT OF CHOOSING THE RIGHT TOWN There is a moment that happens sometimes when I am sitting with homeowners and reviewing long term numbers. Usually they lean back in their chair. Their eyes shift slightly to the ceiling. And they go quiet. Not because anything terrible happened, but because something clicked. For the first time, they realize that property taxes are not a yearly annoyance. They are a long term financial force that shapes the trajectory of their wealth.

This chapter is about that moment.

What Happens When You Stop Losing Money Every Year In Chapter 2 we looked at how tax differences accumulate over ten, fifteen, and twenty years. Those raw totals are powerful enough on their own. But the real magic happens when you consider what that money could have been doing instead. If you saved even a portion of the money you would have otherwise spent on taxes, your long term financial picture could look very different. Let us use a conservative example. You save $10,000 dollars per year by moving to a lower tax town. You invest it at a modest average return of 5 percent (not guaranteed, of course). After 15 years, between contributions and growth, you could have well over $200,000 dollars in future value.

And this is only using the tax savings. It does not count: • Additional appreciation in a better market • Lower ongoing costs • Improved quality of life that lets you plan more efficiently • Reduced financial stress that frees up mental bandwidth The Compounding Effect Compounding is one of the most powerful forces in finance. Albert Einstein supposedly called it the eighth wonder of the world. Whether he really said it or not, the message stands. Money that grows upon itself grows faster over time. If you save $12,000 per year by relocating to a lower tax town and you invest that savings rather than letting it disappear: • After 10 years, you are ahead by more than 150,000 (depending on returns) • After 15 years, you could be ahead by 220,000 or more • After 20 years, your advantage might exceed 300,000 These numbers are estimates. Your actual results depend on investment choices and market conditions. I am not an investment advisor. I am simply showing how tax savings can be repurposed into something that builds your future instead of draining it. A Different Way to Think About Taxes Most homeowners never frame taxes this way. They see them as a bill. They pay them. They move on. But once you start viewing taxes through a long term lens, your relationship with them changes.

Instead of saying: “This is just what I have to pay,” you start asking:

“Is this the best use of my money.”

You begin thinking like an investor rather than a bill payer. And when homeowners begin thinking this way, they often discover they can improve their life, their home, their financial position, and their future without spending a penny more each month. A Story That Illustrates Long Term Wealth Shift A homeowner I spoke with recently lived in a beautiful older town. Taxes were thirty two thousand dollars a year. They assumed this was simply the price of living in a good area with charm and character. They never questioned it. One day they saw a home online in a nearby town they had never seriously considered. The taxes were nineteen thousand dollars. They thought it was a typo. It was not. This sparked curiosity. They compared neighborhoods. They compared schools. They compared commute times. What surprised them most was that the second town had stronger long term appreciation over the last fifteen years. They moved. Their monthly expenses dropped. Their home value held up well. After a few years, they refinanced and used the savings to invest. They told me later that if they had stayed in their old town, they would have paid far more in taxes and missed the financial breathing room they now enjoy. The move changed their future trajectory. Not because they got lucky. But because they began thinking like strategic homeowners. Lifestyle and Wealth Are Connected Financial comfort and quality of life reinforce each other. When you lower your expenses:

• You sleep better • You plan better • You save more • You invest more • You have more options • You feel more secure

When your expenses are high: • You feel more pressure • You have fewer choices

• You become vulnerable to unexpected changes • You often postpone improvements or dreams

Your home should be a place of comfort. Your tax bill should not be a monthly or yearly source of stress. Your Homework Ask yourself these questions: • If my taxes were 8,000 to 15,000 dollars lower each year, how would my life change. • What would I do with that extra money. • Would I invest it. • Would I improve my home. • Would I save it. • Would I travel more. • Would I feel less stress. These questions are personal. Only you can answer them. But they often reveal more than people expect. Once you run the numbers for yourself, if you want to explore how you could turn those insights into a real plan, that is where I can guide you.

CHAPTER 7 WHAT HIGHER INCOME BUYERS ACTUALLY LOOK FOR IN NEW JERSEY When you begin comparing towns, it helps to understand what other buyers are looking for. Especially buyers who have options. Higher income buyers tend to be selective. They look carefully at value, lifestyle, long term potential, schools, community character, and the overall feeling of a place. Understanding what these buyers want can help you choose a town that not only fits your current lifestyle but also aligns with strong resale value in the future. The Combination of Logic and Emotion Higher income buyers often balance two things: • Logical criteria such as taxes, schools, crime rates, and commute • Emotional criteria such as vibe, atmosphere, and sense of belonging

They want both to feel right.

This is one reason why some towns with seemingly high home prices still have constant demand. They offer a lifestyle people deeply value. What I See Buyers Prioritize Again and Again Here are the elements I hear repeated in conversations with buyers who are upgrading or relocating within New Jersey:

1. Lower Effective Tax Rate Not just lower taxes, but taxes that make sense relative to home value. Buyers like feeling that their money is going somewhere meaningful. 2. Strong Schools Even buyers without children often want to live in a district that families desire. Strong school districts stabilize home values and attract consistent demand. 3. Safety and Stability A sense of security, quiet streets, and neighborhoods where Many people move for more space. A quarter acre in one town might feel cramped, while a half acre in another town feels open and peaceful. 5. Updated Homes or Newer Construction Higher income buyers often prefer homes that are move in ready or have been updated. They value convenience. 6. Amenities Within Reach They want shopping, dining, parks, and entertainment nearby. They want convenience without living in congestion. 7. Commute Flexibility people take care of their homes. 4. Larger Lots or More Privacy Not everyone works in New York City anymore, but many still want access. Others work hybrid schedules and want a location that feels balanced. A Tale of Two Towns Consider two New Jersey towns that sit roughly the same distance from New York City.

Town A: • High taxes • Good schools

• Charming downtown • Beautiful older homes • Limited parking

• Smaller lots • Busy neighborhoods • Heavy demand Town B: • Lower taxes • Excellent schools • Larger lots

• Newer homes • Quiet streets • Still close to highways and transit • More privacy • Also high demand

Many people assume Town A is always more desirable because it offers charm and convenience. But when they compare pricing and taxes, they often realize Town B offers better long term value, lower monthly costs, and a more relaxed lifestyle.

This happens more than you would expect.

Why Understanding Buyer Preferences Matters to You If you choose to relocate to a lower tax town that higher income buyers also find attractive, you position yourself for: • Strong resale value • Consistent demand • A healthy long term investment • A home that attracts motivated buyers in the future You also position yourself in a community where people tend to take care of their homes, invest in their neighborhoods, and value stability. A Story That Illustrates Lifestyle Priorities I once worked with a couple who lived in a walkable town with a lot of charm. They loved the downtown. They loved the culture.

But the taxes were high, and their home felt small for their growing family. They were reluctant to leave because they felt emotionally tied to the area. When they started exploring other towns, they

discovered a community where: • The schools were just as good • The lots were larger • The taxes were far lower • The homes were newer • The environment was quieter

They drove through the new town at dusk on a weekday. Kids were riding bikes. Couples walked their dogs. The street was peaceful. Something clicked for them. They told me later that they realized they were living in the town they thought they “should” love, not the town they actually wanted. Their move did not just improve their finances. It improved their day to day life. Your Homework As you explore potential towns, take note of your emotional reactions. Some places simply feel more like home. Combine that with the financial data, and you will find clarity quickly. And if you want help understanding how a town you love fits into your long term goals, that is where I can support you when you are ready.

CHAPTER 8 HOW TO STRATEGICALLY SELL

YOUR CURRENT HOME IN A HIGH TAX TOWN

Selling a home in a high tax town is absolutely doable, but it requires strategy. Higher taxes do not mean buyers will ignore your home. They simply mean that the marketing, pricing, and presentation need to be thoughtful, effective and on point. This chapter walks you through how I approach this with clients, and how you can think about it as you plan your own move. Understanding Buyer Sensitivity Buyers today are more educated than ever. They compare towns. They study taxes. They calculate monthly costs. If a buyer is choosing between two homes that are similar in size, style, and condition but differ significantly in taxes, they will factor that into their decision. This does not mean your home will not sell. It simply means: • Your pricing needs to make sense • Your home needs to stand out • Your listing needs to highlight its strengths clearly • You need a Realtor who understands how to position a high tax property Pricing Strategy Is Everything Pricing a home in a high tax town requires balancing the home’s true value with buyer perception. You do not want to underprice your home and leave money on the table, but you also do not want to overprice it and end up with extended days on market, 36

which can weaken your negotiating position.

A smart pricing strategy: • Attracts more buyers • Creates competition • Minimizes concerns about taxes • Signals value • Helps your home stand out compared to nearby listings This is why having a Realtor who understands your specific market is crucial. Pricing is part science, part art, and part experience. Presentation Matters Even More A well presented home sells better in any market, but especially in high tax towns. Buyers need to feel that the home is worth every penny of the ownership cost.

This means: • Great photos • Clean, decluttered spaces • Professional staging • Great curb appeal • Ambiance and lighting • Highlighting unique features • Showing off updates

• Handling minor repairs • Updated mechanicals • Making the home feel inviting and modern

Higher taxes can make buyers more selective. Presentation is how you earn their confidence. Addressing the Tax Issue the Right Way Hiding or downplaying taxes does not work. Buyers will find the numbers anyway.

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