| P.L.1991, c.431 with final retroactive | | | | Exemption and Abatement Law, there were three |
| amendments effective August 5, 1992 | | | | types of property to which a qualified |
| consolidated, into one more flexible law, the | | | | municipality (a municipality with "areas in |
| various long term tax exemption laws under | | | | need of rehabilitation") could grant a |
| which municipalities may agree with private | | | | partial exemption and abatement for a |
| entities to undertake redevelopment projects | | | | five-year period.These property types |
| in return for tax exemptions.P.L.1991, c.441, | | | | included:Homeowner improvements (including |
| effective for the first full tax year | | | | additions and enlargements) made to one-unit |
| commencing after its January 18, 1992 | | | | or two-unit residential dwellings that were |
| enactment, consolidated the various | | | | more than 20 years old. As determined by |
| five-year tax abatement and exemption laws | | | | ordinance the first $4,000, $10,000 or |
| into one, more standardized law to govern | | | | $15,000 of increased value due to improvement |
| all tax abatements and exemption regardless | | | | on each unit could be exempted from taxation |
| of the type of structure.Long Term Tax | | | | (see N.J.S.A. 54:4-3.72 to 3.79).Commercial |
| Exemption LawPrior to 1993, which was the | | | | and industrial improvements and construction |
| first full year of operation governed by the | | | | projects (with less than a 30% increase in |
| new Long Term Tax Exemption Law, under the | | | | building volume) could have the full assessed |
| provisions of N.J.S.A.40:55C-40, the "Urban | | | | value of the improvement exempted with |
| Renewal Corporation and Association Law of | | | | payments in-lieu of taxes made at 2%of |
| 1961," commonly known as the Fox-Lance Act, a | | | | project cost or 15% of annual gross revenues |
| qualified municipality (a municipality with | | | | or an in-lieu of tax payment phased-in. (see |
| "areas in need of rehabilitation") could | | | | N.J.S.A. 54:4-3.94to 3.112).Multiple dwelling |
| abate from 15 to 20 years the taxes on newly | | | | improvements or conversion of other types of |
| constructed industrial, commercial, cultural, | | | | structures to multiple dwellings could have |
| or residential projects of a corporation, | | | | up to 30% of the full value of the |
| with profits in excess of the limited profits | | | | improvement or conversion alteration |
| returned to the municipality, or from 30 to | | | | exempted. No in-lieu of tax payment was |
| 35 years for condominium projects. | | | | required (see N.J.S.A. 54:4-3.121 to |
| Condominium projects were given 30 to 35 | | | | 3.129).Commencing in 1993 the provisions of |
| years in order to provide a realistic period | | | | N.J.S.A. 40A:21-1 et seq., the "Five-Year |
| for permanent financing. Also, prior to 1993 | | | | Exemption and Abatement Law," which |
| under the provisions of N.J.S.A.55:16-1 et | | | | consolidated all provisions of the previous |
| seq., the "Limited-Dividend Nonprofit Housing | | | | five-year abatement statutes, permitted a |
| Corporation or Association Law," a qualified | | | | qualified municipality to grant partial |
| municipality could abate for up to 50 years | | | | exemptions and abatements on residential |
| the taxes on newly constructed housing. | | | | dwellings, non-residential structures and |
| Further, under N.J.S.A.55:14I-1 et seq., a | | | | multiple dwellings in the same way the pre |
| qualified municipality could abate for up to | | | | 1993 law did, with the following notable |
| 50 years the taxes on newly constructed | | | | exceptions made to the new law:A new, single |
| senior housing. Lastly, prior to 1993, under | | | | definition of "areas in need of |
| the provisions of N.J.S.A.40:55C-77, the | | | | rehabilitation" was established to govern all |
| "Urban Renewal Nonprofit Corporation Law of | | | | exemptions and abatements which, if chosen, |
| 1965," basically the same types of properties | | | | could enable an entire municipality to be |
| and projects as the Fox-Lance Act could be | | | | designated as an area in need of |
| abated for 20 to 25 years with all profits | | | | rehabilitation (thus permitting new |
| being returned to the municipality. In all | | | | structures to facilitate infill |
| cases under these property tax exemption laws | | | | construction).The new five-year law also |
| in-lieu of tax payments were | | | | permitted, for the first time, tax abatements |
| required.Commencing in 1993 the provisions of | | | | and exemptions for new construction of |
| N.J.S.A.40A:20-1 et seq. permitted a | | | | single family and multi-family dwelling units |
| qualified municipality to abate the taxes on | | | | and non-residential structures rather than |
| properties and projects in the same way the | | | | just improvements or enlargements to such |
| pre 1993 law did with the following notable | | | | properties.The new law also increased the |
| exceptions:A new, flexible in-lieu of tax | | | | allowable maximum tax exemptions for the |
| formula was established with a phasing-in of | | | | value added by an improvement from $4,000, |
| payments in-lieu of taxes to occur under both | | | | $10,000, and $15,000 to $5,000, $15,000 and |
| the percent of gross rental formula and the | | | | $25,000, respectively, as the municipal |
| percent of total project cost formula.The | | | | ordinance may specify.Biography: Gerald |
| formulas for computing payment in-lieu of | | | | 'Jerry' Dowgin "The Property Tax Doctor" and |
| taxes for both office projects and housing | | | | the author of the Homeowner's Assessment |
| projects were changed. The minimum annual | | | | Review Guide ( a former tax assessor worked |
| service charge for office buildings was | | | | in the field of public finance at the State |
| reduced from 15 to 10 percent of the annual | | | | and local levels in New Jersey for more than |
| gross revenues of the project or units of the | | | | three decades until his retirement in 2001. |
| project. Municipalities retained the | | | | As a Supervising Tax Analyst in the Office |
| option of computing the payment in-lieu of | | | | of Research and Statistics in the Division of |
| taxes at no less than 2 percent of the total | | | | Taxation in the New Jersey Department of |
| project cost or total project units cost. | | | | Treasury he worked principally on local |
| For housing projects the annual service | | | | property tax issues. Then he joined the |
| charge was changed from a minimum of 15 | | | | Office of Legislative Services (OLS) in 1983 |
| percent to a maximum of 15 percent of annual | | | | and served as the Secretary to the New Jersey |
| gross revenue of the project or from a | | | | Property Tax Assessment Study Commission for |
| minimum 2 percent to a maximum 2 percent of | | | | four years. While working in the OLS, Local |
| the total project cost or total project unit | | | | Government Section he researched, drafted, |
| cost.The payment in-lieu of tax formulas | | | | and estimated the cost of the Senior Property |
| remains basically unchanged for all other | | | | Tax Freeze Bill which was signed onto law and |
| types of industrial, commercial or cultural | | | | worked on legislation that became law that |
| projects.Five-Year Exemption and Abatement | | | | virtually stopped the tax assessment practice |
| LawPrior to 1993, which was the first full | | | | of "Spot Assessments" in New Jersey that had |
| year of operation under the new Five-Year | | | | treated many property taxpayers unfairly. |