West Orange Town Council Advances Tax Exemption Ordinance

WEST ORANGE, NJ — The West Orange Town Council unanimously voted to advance an ordinance involving tax exemptions during its meeting last week.

The council passed 2682-22 on first reading at its April 5 meeting. The ordinance spells out the conditions for five-year payment in lieu of tax agreements in the township.

It partially reads:

“The Township of West Orange recognizes that there are residential and commercial areas within its boundaries that are threatened with economic decline. There are, however, various New Jersey statutes which enable municipalities to encourage property owners to improve their properties by offering them temporary relief from a portion of their real estate taxes and to offer incentives to encourage construction of certain commercial and multifamily uses through tax exemptions and payments in lieu of taxes. One such statute is N.J.S.A. 40A:21-1 et seq., the Five-Year Exemption And Abatement Law. This legislation encourages municipalities to offer certain tax incentives to property owners as a means of addressing local problems associated with areas in economic decline.”

The ordinance sets the following schedule for payments:

1. In the first full year after completion, no payment in lieu of taxes otherwise due
2. In the second full year after completion, 20 percent of taxes otherwise due
3. In the third full year after completion, 40 percent of taxes otherwise due
4. In the fourth full year after completion, 60 percent of taxes otherwise due
5. In the fifth full year after completion, 80 percent of taxes otherwise due

Read the full ordinance here. Watch a video of the April 5 meeting below.

"The five-year tax exemption is an incentive to improve to increase property value, however, it is the assessment levied on the improvements that is spread over five years, allowing a resident to pay a percentage of the assessment each year over the five-year period," West Orange Council President Susan McCartney told Patch.

Learn more about the New Jersey property tax abatements and exemptions here, including the five-year exemption and abatement.

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