Are You Getting All Your New Jersey Property Tax Breaks?

Own an New Jersey home? Double check that you aren't paying more in property taxes than you need to.

Getting a property tax bill for your New Jersey home is painful – in large part because the Garden State has the highest tax rates in the country. As you know, your home is subject to local property taxes – year in and year out. Of course, you want to make sure that you’re not overpaying.

So how can you reduce your property tax burden? There are two main ways. The first method is available to all New Jersey homeowners. The second depends on whether you meet certain qualifications. If you meet those qualifications, you can seek tax relief using both methods.

Method #1 – Appeal the Taxable Value of Your Home

You may know that the New Jersey authorities compute your property tax by multiplying your home’s taxable value by the tax rate.

Example: Tom and Ann own a home in New Jersey. The assessor has placed a taxable value of $200,000 on the home. If the tax rate is 1%, Tom and Ann will owe $2,000 in property tax. If they can reduce the taxable value of their home, their property tax bill will be lower. So, Tom and Ann appeal the $200,000 taxable value of their home. The appeals board reduces that value to $150,000. Now, Tom and Ann owe only $1,500 in property tax on their New Jersey home.

If you believe that the tax assessor has misjudged the value of your home – or if the taxable value is higher than that of similar homes – you might want to pursue an appeal. For more information, read Should You Challenge Your Property Tax Assessment in New Jersey and Procedures for Challenging Your Property Tax Assessment in New Jersey.

Method #2 –Get All the Tax Breaks You’re Entitled To

New Jersey allows for reduced property taxes if you meet certain requirements. Here’s a summary of the chief programs in New Jersey.

Basic homestead rebate or credit. Many New Jersey homeowners are entitled to a rebate or credit that is a percentage of the first $10,000 in property tax that they paid last year. The percentage depends on the owner’s annual income. The higher your income, the lower the percentage. If your annual income exceeds $250,000, you won’t qualify for any rebate or credit.

Seniors. If you’re 65 years old or older, you can get an additional homestead rebate. The amount depends on your income.

Blind or disabled people. You may qualify for an additional rebate similar to that available to seniors.

Veterans. The home of a totally disabled veteran is exempt from property tax. Otherwise, a veteran who actively served in time of war can get a property tax credit of $250 – as can the surviving, unmarried spouse of such a veteran.

Senior tax freeze. Some additional tax benefits are available if: (1) you’re 65 years old or older, or receiving Social Security disability payments; (2) you've lived in New Jersey continuously for ten or more years; (3) you've lived in your current home for at least the last three years; (4) you've kept current with paying your property taxes; and (5) you meet certain income limitations. If you can jump through all these hoops, you may qualify for reimbursement of some property tax increases. This gets complicated, but it’s well worth exploring.

Although New Jersey laws set statewide property tax rules, your local government handles the administration and levying of the tax. Contact your local tax assessor for complete details on property tax exemptions. Be sure to ask about any forms you need to complete and the deadline for filing those forms. Contact information for the assessor can be found in the online directory.

In addition to the property tax which is based on the assessed value of your home, your tax bill may include special assessments. Typically these assessments are made to pay for improvements – such as street paving or repaving – in your neighborhood.

Depending on the complexity of your situation, you may want to seek legal help to reduce your New Jersey property tax. To find an experienced real estate lawyer in New Jersey, check out Nolo’s Lawyer Directory.

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