lkplatow: "Most local taxes are strictly on your wage income so if you have a lot of income from stocks or investments, you don't pay anything to your local municipality for that."

Huh? Where did you come up with that?

That's the way it works in my current township and the way it worked in my last one as well. They call it the "Earned Income Tax" (as opposed to the Personal Income Tax). The EIT taxes you only on the income shown on your W-2 form - all stock, investment, bank interest, and anything else other than wages is excluded - there's not even a place to put it on the local income tax form. It's a simple "Enter amount from Box 1 on your W2, calculate 1% of that, and that's what you owe" type form.

There was recently a big stink because they're trying to reform (i.e. lower) property taxes in the state and to do so, they have to come up with an alternative source of revenue for the school districts. There was some talk of switching the EIT for a PIT, which would tax all of that non-wage income, but it got voted down because of the retirees (who are the ones who are most impacted by the high property taxes) - they'd end up paying on their IRA withdrawals and such, so it wouldn't benefit them anyhow.

"That's the way it works in my current township and the way it worked in my last one as well."

I have no doubt that that's the way it works where you live in NJ. I was taking issue with your comment that most jurisdictions around the country operate in the same manner. I don't believe that to be the case. It certainly isn't in NY, MI, or MD for instance.

Be that as it may, I really don't have a problem paying local income tax on dividends and interest, but what really perturbed me when I lived in FL and NC is that they tax you on the value of your stocks, bonds, cash, etc in your brokerage or bank accounts! And I'm not talking about capital gains either. You have to add up the value of all your holdings and then pay an "intangible" tax on them. I don't know how many states have that type of tax, but it really bothered me to pay a tax just because I had certain assets.

I live in PA, and the OP was asking about how taxes work in PA. I wasn't generalizing to the entire country...just the Philly burbs.

My apologies, then. I mistakenly interpreted your statement about "most local taxes" to be a generalization about how taxes are assessed in local jurisdictions throughout the country (at least those jurisdictions that have such a tax).

"Is there really an ADDITIONAL amount for leaving the state"

Maybe this is a new tax NJ could institute to try to keep the masses from leaving - tax them on the way out and maybe they will stay and pay in some more vs getting hit up on the way out! We just found out that after buying a 2 yr old resale that our township (in NJ) is reassessing. Other towns around us were reassessed last year and people are leaving in droves. I feel badly for retirees whose taxes shot up from $10K a year to $17K overnight. Someone else we know was paying $22K a year for a 5200 sq ft house - he put in a pool and finished his basement. Then the township reassessed and his taxes shot up to $35,000 this year.
A few weeks ago he put his house on the market - he sure has to find the right buyer to sign up for $35,000 a year in taxes. There are still some empty 1 acre lots on the street. The builder is now paying $9K PER LOT (vs $3K before the reassessment).

And the fundraising goes on and on in the schools, despite the skyrocketing taxes...

A revaluation, in a perfect scenario, should not significantly increase a homeowners taxes. Unless,of course, the homeowner has made improvments to home without permits,hence not paying taxes on the improvments..I have gone thru 2 reval's in the past 20 years, and my taxes never increased more then a few hundred dollars..If home valuations increase, the tax rate usually decreases..
If everyone you note has such large tax increases, where is all the $$$ going? Normally a towns budget doesn't vary much year to year, so i'd like to hear how your township explains its increased budget with the windfall from its reval

While NJ has the highest property taxes in the nation, it has the lowest gasoline taxes in the nation. A recent study concluded that the average TOTAL tax burden in NJ puts us at number 7.

There are 6 places in this country where you pay more in taxes than NJ. I'm glad I don't live in any of them!

While NJ has the highest property taxes in the nation, it has the lowest gasoline taxes in the nation. A recent study concluded that the average TOTAL tax burden in NJ puts us at number 7.

Not having self serve gas helps. Back around 1988 I went to Southern California. I was calling my dad on a regular basis, giving him gas prices for full & self serve there. My dad reported it to the NJ Gasoline Retailers Association (NJ GRA). He had me take pictures of price signs also. My pictures ended up going to a rally in Trenton... my dad and the NJ GRA worked their tails off keeping self serve out of NJ... but that's a whole other discussion lol

roselvr "my dad and the NJ GRA worked their tails off keeping self serve out of NJ... but that's a whole other discussion lol"

Three cheers for your dad! Self serve is one of those consumer cost saving myths such as ATM's and self serve check out's at the big box stores and supermarkets...LOL!

I HATE to pump gas...and I would hate even further to have to pump gas, especially in snow, sleet, rain etc...and pay even more for the "privilige"...as is the case in neighboring PA & NY.

One more point about NJ...not all areas have high auto insurance...ours was cut in half when we moved here from NYC....even with two new cars, both of higher value..as opposed to one new and one not so new...both of lower value.

Just as 'logic' said (sorry, I seem to be following you around the forums :->), but we too found our auto insurance dropped more than 1/2 when we moved here from NY. We still can't figure out why people are complaining about the auto insurance here -we had a similar scenario with the types of cars, too. As to real estate taxes, our town had a reval last year, some taxes went up, some went down - no one had enormous jumps one way or another, just as it was supposed to.

There are some 'exit' taxes on sales of houses.
Pa used to tax on capital gains on sale of a principal residence if you did not purchase another principal residence in the state.
A friend got hit on this when moving Pa to Ma after a layoff.

Not happy. Just heard that transfer tax in Philly is not the 1% I was expecting, but rather TWO PERCENT on the way in and AGAIN on the way out. Can this possibly be correct? I am just floored. I thought PA was meant to be less expensive! That is a big chunk of change to be putting out as you are buying a place.

The only good news is that the owner of the house we like has been approved for a 10 year tax abatement taking the taxes from just below 10k a year to around 1k a year.

Are there any other unpleasant surprises waiting related to the abatement?

Unless it has changed in the last 18 months,i was taxed 1%...

Qdognj; I certainly hope you are right. The agent told me it was 4% total, split between the buyer and seller.

It's not good news if she got that wrong. Perhaps she is a new agent, but that's really no excuse.

I have to double check this with a PA real estate attorney.

here is q&a about the transfer fee

Here is a link that might be useful: PA Q&A about transfer fee

better q&a

Here is a link that might be useful: Fee answers

Sadly the agent is right. PA transfer tax is 2% split between buyer and seller.

Philadelphia transfer tax on the other hand is 4% split between buyer and seller.

In New Jersey you pay only 1% transfer tax and only when you sell. You pay 1% mansion tax if you buy a home over 1 Million dollars.
So far NJ is sounding like the better deal - although the lower property taxes are definitely a pull.

Now I'm thinking we should buy a cheaper fixer upper and do another renovation. That is if we're not put off Philly altogether!

When we come to sell we'll be paying 5 or 6% broker fees (a portion of which I will get back being and agent), plus the 2% transfer tax. That's 8% off the top. That seems pretty high to me, especially when you factor in the fact that you've already paid 2% on moving in. So now you're at 10% of the homes value gone. Ouch.

We have some tough decisions to make!

Why not move to PA but stay outside of Philly? You'll save yourself 1% transfer tax on both ends plus the 4+% wage tax.

The realty transfer fee is statewide 1%, not local to Philly...The wage tax is local,however

Don't move into Philly!!! Great suburbs easily within driving distance...and to clarify, 1% each side of transaction is statewide, apparently 4% is local to Philadelphia city limits....

"Don't move into Philly!!! Great suburbs easily within driving distance...and to clarify, 1% each side of transaction is statewide, apparently 4% is local to Philadelphia city limits...."

Problem is the big part of the appeal of Philly for us is the similarity to Hoboken - being in the 'middle' of everything. We were looking at Society Hill and Rittenhouse Square areas.

Still I am open to suggestion - does anyone have any tips for nice areas outside city limits to avoid the 4% transfer tax and over 4% wage tax??

We can go and take a drive around this weekend if anyone has some suggestions of where to look. I am not familiar with the outskirts of Philly at all.

I love Rittenhouse Square area,and if you want to be in the "middle of it all", then that is a good area.. If you want the "Hoboken" type lifestyle, then you need to be in Philly..If you want a "suburb" lifestyle, there are many areas...If i my children were out of school, i'd be in the city, but with children, i love the suburbs...

We just love the row houses in Society Hill too - gorgeous looking streets and still close to everything.

Any ideas of the zip codes of the suburbs we should be looking at? Then I can check the MLS to see what is available and I can do drive bys.

Here is a link to a section of Philadelphia, Chestnut Hill..
you should "google" Philladelphia suburbs, and perhaps i can point you in the right direction...Is it my understanding you'd prefer townhouse living as opposed to SFH? Large lot or small? school districts,important? or private schools?mass transit? is a downtown district important?

Here is a link that might be useful: Philly

We would prefer not to live in a modern townhome. An historical row house is fine, otherwise SFH. Lot size doesn't matter. School districts important only for resale at thispoint, although we may need them in the future. Who knows!

There must be suburbs which are more desirable than others?

We decided against looking for homes along the "Mainline" which is a very affluent area, but no so-called bang for your buck in housing.. At the time we were looking 1 mil got you a house that need help..
Inner burb north+- of the city that seemed nice were Abington
We are 20 miles north+- and looked in areas such as Yardley and Newtown in Bucks County..
In Montgomery county we looked in Ambler(very nice,small downtown) Blue Bell(One of Money Magazines picks in 2005),Lower Gywnedd,Fort Washington, and Horsham(top 15 in Money Magazine this fall)...
a tad north of here, 5 miles more is Doylestown, great small town, all types of housing, lively downtown, historic..It is also just below New Hope..
If you have any specific questions, i'll gladly answer them

"I HATE to pump gas...and I would hate even further to have to pump gas, especially in snow, sleet, rain etc...and pay even more for the "privilige"...as is the case in neighboring PA & NY."

There are plenty of gas stations in PA that will pump it for you. The one that pumps it for me in my town is generally the cheapest station.
-----------
Beth:
"....Be that as it may, I really don't have a problem paying local income tax on dividends and interest..."

A case of having too much of that nasty green stuff on your hands. LOL Our tiny local government has so much money that they are choking on it. They cry poverty but waste millions when the State government hands it to them for a "make work" project. If you conveniently hand it to them, they will always find a way to spend it. If the money comes too easily, they know they will have no trouble demanding even more of it which is just another way of depriving you of your freedom as they feel they know better how to spend your money than you do (the masses).

P.S. P.M. me and I will provide you with an account in which you can make a deposit and relieve your burden. I guarantee that the money will be more efficiently spent, even if I sat in a bar for ten years.

Wow just realized that the above post of "better spent money" was a poor example, as liquor purchases are comprised of mostly ALL tax.

qdognj; thanks. I will probably drive out and check out Chesnut Hill this week sometime to get a feel for it.

Any comments on Mt Airy? I see some nice looking houses on the MLS there.

Doylestown is nice, but actually a further commute for DH than Philly is. Yardley would be very convenient and we have been looking both there and Newtown.

I'll look into some of the other areas you mentioned, also.

How about Moorestown NJ, was our 1st choice, but in 2005, there was little inventory...Yardley has a great downtown, very charming..Newtown is close by to Yardley,we actually lost 2 homes in bidding wars in Newtown...Larger homes on good sized lots,but that is not what you apparently are looking for...Does your DH play golf? Many communties have mixed housing(sfh,townhomes) situated around courses..
Is your DH job in NJ? If so, i'd really look into the NJ 'burbs of Philly...Like i mentioned Moorestown(Money mag 2004 BEST place to live), other scenic areas, Riverton, and areas in Haddonfield Heights and parts of Cherry Hill(though taxes there are CRAZY!!

Getting in late on the car insurance....

My husband moved from Manhattan to Jersey City for a year (before he was my husband :-) ). His car insurance went up 50%! Same car, both garaged in a building with a doorman, although the NYC apartment was mandatory valet parking & the Jersey City building was park your own with roll-up anti-theft garage doors. To say he was shocked is an understatement.

Is your DH job in NJ? If so, i'd really look into the NJ 'burbs of Philly...Like i mentioned Moorestown(Money mag 2004 BEST place to live), other scenic areas, Riverton, and areas in Haddonfield Heights and parts of Cherry Hill(though taxes there are CRAZY!!

I made a pretty extensive post at Citydata in the NJ section about Moorestown not too long ago. If needed, I can find it and link to it... While parts of it are nice, the traffic is horrible, especially this time of the year with so many malls close by. Anyone thinking of moving to that area should spend a few days driving around to get to know the town.

Coming from North Jersey, one might not be bothered by it. Route 38 is like Route 22. You can also get to the major highways (295 & turnpike) there. When I moved out of Union County, I was in a bit of a shock due to no traffic, things being laid back. When I feel I miss it, all I have to do is drive over to Moorestown & I feel like I never left.

Three cheers for your dad! Self serve is one of those consumer cost saving myths such as ATM's and self serve check out's at the big box stores and supermarkets...LOL!

I HATE to pump gas...and I would hate even further to have to pump gas, especially in snow, sleet, rain etc...and pay even more for the "privilige"...as is the case in neighboring PA & NY.

I've pumped gas all of my life & don't miss having to do it lol

I hope that we can keep self serve out of NJ...

Rte 22 is NOT North Jersey :)
At least not to us from Bergen County...Moorsetown is a bit like Ridgewood, though,imho, Ridgewood is a much better place to live :)

Well, to someone down in Burlington County it is. lol

Charge you to leave? Further evidence NJ sucks...

This has been fun to read!

I escaped from northern Jersey in 1986 when I moved to PA. My taxes were lower than NJ but I soon found out all my neighbors were moving to PA too. And the local school districe was bursting at the seams. They started raising our property taxes by double digits almost yearly. And on top of that in PA you have no say on your school taxes. You cannot vote. "Here's your tax bill. Pay it or move" was what we were told by th eschool board. They built schools with marble walls. They spent money like it was going out of style. One year we had a 30% property tax increase. We attended the schol board meeting in droves and they had the State Police protecting them from the homeowners. They passed the tax increase over the crying of the seniors living in Chestnuthill Twp. Our local school system went from 1,200 kids to 7,800 when we left.

The crime became worse than NJ. I had to escape PA. I now live where there are no city people at all. And I'm comfortable it will stay that way.

But I go back to NJ & PA on a yearly basis to visit in laws. And both my wife and I agree. They don't PRINT enough money for us to go back there to live.

christopherh; where in PA were you?

don't let christopher scare you away from Pa..I can assure you,the crime rate is no where near what he describes, at least in the area i live...Now they don't call philly, Kiladelphia for nothing,lol ;)

We were in the Poconos. Effort, Pa to be exact.

That area is now nothing more than a bedroom community of Noo Yawk City. I once read in the Noo Yawk Times where the Poconos is the "unofficial sixth Boro of Noo Yawk City". And the people living there now are PROUD of that! They get in their car and drive 75 to 100 miles each way to work in the city. Or they spend $500 a month on busfare.

They take their kids out of the Bronx or Brookyn and stick them in the "middle of nowhere" where there are no malls nearby or anything else. So the kids with their street smarts "find" things to do while mom and dad are still at work and won't get home until 7:30 at night.

Property values are stagnant. I paid $80,000 for my house in 1987. I looked in Realtor.com today and my neighbor's house which is similar to mine is on the market for $195,000. A $100,000 increase in 20 years! That's because foreclosures are at an all time high. And it's not because of the subprime market. People are just walking away from the house and going back to the city.

This country boy from Joisey is VERY happy where he is. A little town of 850 people and an elementary school with 56 students. And we haven't needed to lock our doors since we came here.

That explains chistopherh's opinion of PA, because the area to which he refers is not-so-good...The crime rate in that area is surprisingly high...

Great discussion! I live on the PA/NJ border so I regularly see all these items being discussed (I've also learned a few things from this thread).

One thing that was missed in all the tax discussion is the income tax that is charged by most school districts in Bucks County. So on top of that property tax bill you see there is also typically a 1% income tax that goes to the school district.

Another thing i have learned is that while property taxes appear to be lower then NJ, and in most cases this is true,PA "fees" you to death..For example, my property tax in NJ included garbage pickup twice a week,recycling, and sewer charges..here in PA it is all seperate "fees"..You pay a sewer charge based on water usage, which is a crock when you water your plants/lawn/top off pool etc, as that water is never returned to the sewer system, but you are charged as if if it was...Garbage pickup is the homeowner responsibility, and billed quarterly...

Qdog, I agree. There are many nice places to live in both PA and NJ and there are always the bad areas. The same as any other state.

Call me weird, but I actually like living in NJ. Yes my property taxes are more than most people's mortgage payments, but we do live in a town with one of the top school districts. And even in a down market our property values have held steady. Also I love being fairly close to NYC. We get the best of both worlds. We are close to the best (IMO) city in the world while being able to raise our children in the suburbs.

And this is just my experience so don't attack me, but I have found the NY/NJ area to have the most diverse, highly educated and sophisticated populace in the country. Most people we know are college educated, worldly and tolerant of other religions and races. I haven't found that to be the case in most other parts of the country.

C

C, you're preaching to the choir!!!! I couldn't agree with you more...While i like living in PA, similar distance to Philly, as we were from NYC, i would 100% concur with your last paragraph....

Qdog, I live in Monmouth County,NJ. My garbage pickup, sewer and water fees are not included in my taxes of over $14,000. The good thing is that my taxes were reduced from over $16,000 this past July after all homes were reappraised.
Count me in as another one who likes NJ! Many people who have never been here think we're just gas tanks near the airport. Once you get away from that, we have the ocean, farmland, horses and beautiful towns. I just wish we could clean up the politics, but I know we are not the only state with dirty politicians.

We were in Philly again today. Think I am in love with Society Hill. We may be narrowing down the search! : )

New Hope/ Lambertville is still a close second, but I just think Yardley/ Newtown/ Hopewell and even Princeton are probably being ruled out as either too small, or too expensive for what you get.

We're going to look at Chestnut Hill tomorrow.

Thanks for all the comments! Love these discussions, at least we won't be going into anything with our eyes closed.

Update;

Well we loved Chestnut Hill. Qdognj; thanks for the tip - probably wouldn't have come across it without your tip. We've actually seen a house we really like there as well as one we like a lot in Society Hill.

Now of course I find out that the 1-95 bridge next to Yardley is going to have long term construction for two years starting in 2009. My husband's work is 8 minutes on the New Jersey side. I don't know if this is some kind of omen that Philly area won't work. Very frustrating as we had pretty much decided on Society Hill or Chestnut Hill.

Who knows how bad the bridge will be. They are taking it from 2 lanes each way to one lane each way. Who knows what the impact will be.

Maybe we'll end up in New Hope after all. Thanks anyway!

the construction you speak of can be avoided(likley with all the other people who know the area) by taking Rte 1 across the river instead of 95 N to bridge near Yardley...then go N on the NJ side...google the map...I would not let construction(it goes on ALL the time) deter me from a home i loved...Best of luck!!!!

Just took a look at the map - it's a bit out of the way, but doesn't look like the end of the world.

Knowing that we really like Chestnut Hill, are there any other nice little places around Philly that you would recommend? Preferably closer to 1-95?

Appreciate all the advice!