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.

By , Attorney

Receiving a property tax bill for your New Jersey home can be painful. Homeowners in the Garden State face the highest property tax rates in the country. But even with that burden, there may be steps that you can take to reduce your annual tax bill.

There are two primary ways of lowering your property taxes. The first is available to all New Jersey homeowners. The second method depends on whether you meet certain qualifications. If you do meet those qualifications, you can seek tax relief using both methods.

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. While you cannot affect the tax rate (except through local elections!), you might be able to challenge the taxable value of your home.

Consider this example: Alexander and Eliza own a home in New Jersey. The county tax assessor has placed a taxable value of $300,000 on the home. If the tax rate is 1%, Alexander and Eliza will owe $3,000 in property tax. If they can reduce the taxable value of their home, of course, their property tax bill will be lower. So, Alexander and Eliza appeal the $300,000 taxable value of their home. The appeals board agrees, and reduces that value to $250,000. Following that appeal, Alexander and Eliza owe only $2,500 in property tax on their New Jersey home. (Assuming these values stay constant, they are likely to save many thousands of dollars over the course of their lives from this one minor adjustment.)

How can you figure out the taxable value of your home? New Jersey's Department of the Treasury allows you to search most counties (known as "vicinages") to view property records. Your county's website may have additional information about the methods, schedules, and records maintained by assessors.

After you have confirmed the taxable value of your home, the Department of Treasury also offers a handy guide to appealing your property tax assessment. Again, the exact process will vary by county, but essentially, you'll need to demonstrate why the value of your home is lower than the assessor believed. Perhaps the assessor mistakenly believed that your home was larger than it is, or in better condition. Such issues could be the subject of an appeal.

For more information, read Should You Challenge Your Property Tax Assessment in New Jersey.

Obtain All the New Jersey Tax Breaks to Which You're Entitled

New Jersey allows for reduced property taxes if you meet certain requirements. Below is 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's 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 will not qualify for any rebate or credit. (See N.J.S.A. § 54:4-8.59.)

Seniors. If 65 years of age or older, you can get an additional homestead rebate. The amount depends on your income. (See N.J.S.A. § 54:4-8.40 et seq.)

Blind or disabled people. Homeowners who are blind or otherwise disabled within the meaning of New Jersey law may qualify for an additional rebate similar to that available to seniors. (See N.J.S.A. § 54:4-8.40 et seq.)

Veterans. The home of a totally disabled veteran is exempt from property tax, as can the surviving spouse. (See N.J.S.A § 54:4-3.30.) Otherwise, a veteran who actively served in time of war can get a property tax credit of $250, which is also available to the surviving and unmarried spouse of such a veteran. (See N.J.S.A. § 54:4-8.10 et seq.).

Senior tax freeze. Additional tax benefits are available if: (1) you are 65 years old or older, or receiving Social Security disability payments; (2) you have 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 can become complicated, but is worth exploring. (See N.J.S.A. § 54:4-8.40 et seq.)

For more information on potential property tax exemptions, take a look at New Jersey's guide to such exemptions compiled by the Department of Taxation.

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 them. Contact information for the assessor can be found in their 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 are made to pay for improvements, such as street paving or repaving, in your neighborhood.

Additional Resources

Depending on the complexity of your situation, you might wish to seek legal, tax, or accounting 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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