The New Jersey Homestead Benefit program provides property tax relief to eligible homeowners, including seniors & low income families. For most homeowners, the benefit is distributed to your municipality in the form of a credit, which reduces your property taxes. However, due to substantial delay in the processing of Homestead Rebate applications, it may take several years after you apply for the rebate, for you to receive it from the State. For example, the State of New Jersey has only just recently processed and paid the Homestead Rebate for 2017.
If you sell your home before your Homestead Rebate is paid, the person who bought your home could unknowingly reap the benefits of YOUR homestead rebate – unless affirmative steps are taken to protect your rights.
In order to protect your well-earned Homestead Rebate, you must raise & settle the issue with your buyer when you enter into a contract of sale. In most cases, you can provide that the contract specify that, should the homestead rebate, to which you are entitled, be paid to the buyer or credited against the real property taxes for the home, after you have closed title, the Buyer must pay or refund to you the amount of the rebate. The contract should also specify that this provision shall survive closing of title and delivery of the deed.