By DONALD WITTKOWSKI
Sea Isle City’s housing market has been evolving from the modest seashore cottages that were popular decades ago to a new generation of larger, upscale resort homes costing millions of dollars.
But despite the trend for bigger, more expensive homes, Sea Isle’s property tax rate continues to be miniscule when compared to most other communities in New Jersey.
According to a story in NJ.com, Sea Isle ranks No. 6 among all towns in the state in having the lowest local property tax rates.
Sea Isle’s average property tax bill was $5,528 in 2022, compared to the statewide average of $9,490, NJ.com reported.
In another key indicator of low taxes, what is known as the “equalized tax rate” was just 0.48 in Sea Isle in 2022, compared to the state average of 2.021. The average equalized tax rate for towns in Cape May County was 0.772 in 2022.
An equalized tax rate shows what a homeowner would pay if each municipality used the same formula to determine property value, according to NJ.com.
Sea Isle has been able to cut or keep its local tax rate the same in four of the last five years. There was a tiny increase in the local tax rate in the 2021 municipal budget following the financial turmoil caused by the outbreak of the global COVID-19 epidemic in 2020.
However, Sea Isle’s Chief Financial Officer Jennifer McIver said the city has largely been immune to the financial pressures caused by the pandemic – and the low tax rate shows it.
“COVID really didn’t hurt the city like a lot of other towns. People still came here,” McIver said of Sea Isle’s tourism market remaining strong.
McIver explained that the city enjoys several advantages that allow it to keep its taxes low.
She noted that Sea Isle entered 2023 with a record-high budget surplus of about $8 million, a figure that reflects the city’s strong financial position overall as well as its conservative fiscal policies.
“On the spending side, we’ve always been conservative,” she said in an interview Thursday.
Sea Isle also benefits from an extraordinarily high tax collection rate of about 98 percent. Simply put, virtually all of the property owners pay their local taxes. Some New Jersey towns struggle with high tax delinquency rates.
“Everybody basically pays,” McIver said of Sea Isle’s property owners.
Sea Isle also has the luxury of having other significant sources of municipal revenue, in addition to property taxes. They include revenue from beach tag sales, parking charges and construction fees, McIver pointed out.
“The construction in the city is helping,” she said.
The Jersey Shore’s sizzling real estate market in recent years has pushed up average home values in Sea Isle well above $1 million. The typical home value in Sea Isle was $1.3 million in December 2022, an increase of 13 percent compared to $1.1 million in December 2021, according to figures compiled by the online real estate giant Zillow.
As home values grow, Sea Isle’s overall tax base continues to rise. The city’s total assessed valuation in 2023 is $4.952 billion, compared to the 2022 figure of $4.857 billion, McIver said.
Nick Preuhs, a Sea Isle realtor with Long & Foster, said the city’s low tax rates make the local housing market more attractive for homebuyers.
“A lot of times, the property taxes are a driving factor in getting people to buy in Sea Isle,” he said.
Even though home prices are generally going up in what has been a robust real estate market, Sea Isle’s low taxes help to keep home purchases more affordable overall, Preuhs said.
“It definitely makes the property more affordable for carrying costs,” he said.
