Property tax and Abatement

[hp100]

I bought the condo in Jersey City, NJ and received the mortgage interest statement from the lender. 

Line 10 Other " real property taxes paid $500.

In the comments section indicates Escrow Reconciliation

$... - beginning balance

$... - deposits

$... - hazard ins [aid

$500 - tax bills paid

$10,000 - Land Improvement

$... - ending balance

I received the letter from Jersey City, 2021 abatement service charge liability

2021 second half service charge liability (payment in lieu of taxes) : $5,000

My question is property tax in TT is sum of 500 and $10,000 ?   What is Abatement ?

[MinhT1]

The $10,000 is a service charge and is not property tax. You can only claim $500 in Property tax.

Abatement means a reduction.

This charge can be added to the basis of your property. When you sell the property, adding this to your cost basis will reduce your capital gain.

[hp100]

The condo was paid about $1 million, abate means reduction.  I did not the reduction, I paid $500 and $10,000 for abatement to the City.  So the property tax is only $500 does not make sense.  The lender sent me the escrow payment over the next year, this showed the estimate of the real Estimate Taxes $10,500.  I am paying $10,500 to the City and do not get the reduction.  So I can use $10,500 for the property tax in TT ?  This condo was 1st sale date was 2011, it might have a abatement in the property tax for a while.  When I bought in 2020, it might pass the abatement period..  

[BillM223]

I encourage you to read this webpage about Jersey City abatements, this New Jersey state webpage on whether or not PILOT payment (payments in lieu of tax) are considered property taxes and therefore deductible (No and No), and just what a PILOT program is in New Jersey.

The takeaway is that Tax is deductible but PILOT payments are not. Armed with this information, you may want to contact your mortgage company and confirm what is tax and what is PILOT (and who is paying your PILOT)?

[hpaik100]

Thank you.  Read the referred article, it made me clear.  Thanks…