How does the Senior Freeze work for multi-unit homes?

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Q. My sister and I own a fully owner occupied two-family and through 2017, I owned and occupied one-third while she owned and occupied two-thirds, and the mortgage reflects this. As of 2018 we each own and occupy half and the deed reflects this change. I applied for the Senior Freeze in 2018 for a base year of 2017. What will happen now that the ownership levels have changed? We are each single and my sister doesn’t qualify for the Senior Freeze.
— Sister

A. The Senior Freeze can get complicated, and even moreso when you’re talking about multi-family properties.

In general, the Senior Freeze is a property tax reimbursement program in New Jersey. It reimburses seniors and disabled persons for property tax increases, said Patricia Daquila, a certified financial planner and certified public accountant with Lassus Wherley, a subsidiary of Peapack-Gladstone Bank, in New Providence.

She said the amount of property taxes paid in the current year must be more than the “base year.”

In your case, you have both a multi-unit property and multiple owners of the property, DAquila said.

“If you own a property that was your principal residence with someone other than your spouse or civil union partner, then your property tax reimbursement is based on your percentage of ownership in the year that you apply,” she said. “In addition, if your principal residence was a unit in a multi-unit property that you owned, then you would enter for each year the proportionate share of the property taxes for the unit you occupied and owned as your principal residence.”

Therefore in 2018, Daquila said, if you owned and occupied 50 percent of the multi-unit property, then you would enter all the property taxes paid on your individual unit.

The tricky part is that your “base year” property taxes would need to be adjusted based on your increase in ownership in 2018, she said. It is now 50 percent and not the lower 33 percent you had previously.

“You would also need to send in a copy of the deed which shows that you now own 50 percent of the property along with a letter from the tax assessor’s office stating that you are now a 50 percent owner of the property and are liable to pay 50 percent of the tax bill,” she said. “This would serve as proof of the ownership percentage change.”

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