Requires detailed disclosure of information concerning required payments in lieu of property taxes to be provided to purchaser of real property constructed pursuant to financial agreement containing long term tax exemption.

A1095

ASSEMBLY, No. 1095

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman ROBERT D. CLIFTON

District 12 (Burlington, Middlesex, Monmouth and Ocean)

Assemblyman ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

SYNOPSIS

���� Requires detailed disclosure of information
concerning required payments in lieu of property taxes to be provided to
purchaser of real property constructed pursuant to financial agreement
containing long term tax exemption.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

requiring the detailed disclosure of information
concerning payments in lieu of property taxes that would be due and owing by a
purchaser of real property constructed pursuant to a financial agreement
containing a long term tax exemption and supplementing P.L.1991, c.431
(C.40A:20-1 et seq.).

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� Prior to the execution of
the agreement of sale of a parcel of real property constructed using a
long-term tax exemption pursuant to the �Long Term Tax Exemption Law,�
P.L.1991, c.431 (C.40A:20-1 et seq.) and subject to the attorney review which,
as applicable, may be required to precede the final execution of the contract
for sale of real estate, the seller of the parcel of real property shall
provide to a prospective purchaser of such a parcel of real property who is one
or more individuals, a detailed, written document explaining the payment in
lieu of property tax required to be paid by the purchaser of such a property
pursuant to an agreement between the municipality and the urban renewal entity
that developed the real property.� The document shall inform the prospective
purchaser about how the payment in lieu of property tax shall be calculated,
the length of the term of the agreement requiring the payment in lieu of
property tax to be made, and whether making a payment in lieu of property taxes
on the parcel of real property shall affect the prospective purchaser�s ability
to qualify for assistance from State property tax relief programs.

���� The prospective purchaser
shall review the document required in this section and shall sign and date the
document, which shall be returned to the seller of the parcel of real property
after the conclusion of an attorney review, if applicable.� If there is no
attorney review, the signed document shall be returned to the seller along with
the executed contract of sale.� The prospective purchaser shall retain a signed
and dated copy of the document.

���� The information required to be
provided in the document shall be provided by the municipality to the seller,
at the expense of the seller, from the agreement entered into between the
municipality and the urban renewal entity.� If the prospective sale of the
parcel of real property is between a seller who is not the urban renewal entity
and a prospective purchaser, the information required to be provided in the
document shall also be provided by the municipality to the seller, at the
expense of the seller, from the agreement entered into between the municipality
and the urban renewal entity.

���� As used in this section,
�seller� shall mean an urban renewal entity, if the property is newly
constructed, or the person who owns the property.

���� 2.� This act shall take effect
immediately.

STATEMENT

���� This bill requires the seller
of certain real property to disclose to a prospective purchaser of the
property, information concerning payments in lieu of property taxes (PILOTs)
required to be made by the owner to the municipality in which the property is
located.� ����������� Under the bill, prior to the execution of the agreement
of sale of a parcel of real property constructed using a long-term tax
exemption pursuant to the �Long Term Tax Exemption Law,� P.L.1991, c.431
(C.40A:20-1 et seq.) and subject to attorney review, as applicable, the seller
of the parcel of real property is required to provide to a prospective
purchaser a detailed, written document explaining the PILOT payment required to
be paid by the purchaser pursuant to an agreement between the municipality and
the urban renewal entity that developed the real property.� The document is
required to inform the prospective purchaser about how the PILOT payment is
calculated, the length of the term of the agreement requiring the PILOT payment
to be made, and whether making a PILOT payment instead of paying property taxes
would affect the prospective purchaser�s ability to qualify for assistance from
State property tax relief programs.

���� The provisions of this bill
are intended to inform prospective purchasers of the effects of purchasing real
property constructed pursuant to the �Long Term Tax Exemption Law.�� Under this
law, a developer enters into a financial agreement with a municipality to
develop the property.� Properties developed under the law are property-tax
exempt and are instead subject to a financial agreement the municipality enters
into with the developer for a payment in lieu of property tax.� This
distinction is important because since the purchasers of these homes do not pay
property taxes, they may be ineligible for State property tax relief programs,
including the $250 veterans� property tax deduction, the veterans� property tax
exemption provided to veterans having a 100 percent service-connected
disability, the $250 property tax deduction for income-limited senior citizens
and persons with disabilities, the homestead property tax reimbursement
(colloquially, the �senior freeze�), and the ANCHOR rebate.� The sponsor believes
that purchasers of these properties should be made aware, prior to the purchase
of such a property, that they may be ineligible for these property tax benefits
provided by the State of New Jersey.