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Homestead Rebate Program Revised
In the past, some homeowners have been eligible for participation in the Homestead Reimbursement (or Rebate) Program. After completing an application which demonstrated their qualification for same, they received rebate checks from the state government, which were intended to offset (in part) the burden of real estate taxes. N.J.S.A. 54:4-8.57 et seq. However, in view of the current fiscal crisis, the administration of the program has been revised. Rebate checks will no longer be issued; instead, qualified homeowners will receive a credit against payment of second quarter 2011 real estate taxes in lieu of a rebate for taxes paid in 2009. Thus, the name of the program has been changed from Homestead Reimbursement (or Rebate) to Homestead Benefit. See P.L. 2010, c. 35, eff. July 1, 2010 (fiscal year 2011 budget). If an eligible homeowner timely files a Homestead Benefit application, he or she is supposed to receive a revised tax bill for 2011 which reflects the credit to be applied to the second quarter 2011 taxes. More information may be found on the Treasury Department’s website: treasury/taxation.  
            The Homestead Benefit Program does not directly affect title insurers and their agents, as it does not affect the lien of real estate taxes; rather, it has a potential impact only on the amount of tax which may be due in certain cases. However, since title companies conducting settlements are often asked to see that real estate taxes are properly adjusted, the program indirectly affects the title industry. Nevertheless, it is important to bear in mind that the title insurance policy does not insure that taxes will be properly adjusted at closing, or against overpayment of real estate taxes; rather, it insures against loss in the event a lien results from an underpayment of real estate taxes. Furthermore, the party allegedly entitled to the homestead benefit tax credit will usually be a seller or a refinancing borrower, neither of whom is the insured. Accordingly, title companies will not be able to provide insurance coverage with respect to the applicability or non-applicability of the program in connection with specific transactions.
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