Profiling Local Property Taxes and Property-Tax Relief Across Garden State

Colleen O'Dea | March 2, 2018 | Housing
Increased transparency at the Department of Community Affairs makes it possible to track property taxes for New Jersey municipalities - and see where and by how much the state tried to offset them

This year’s annual release of property tax information from the New Jersey Department of Community Affairs provides more information than ever about not only the calculation of local property taxes, but also how the state spent more than $400 million in 2017 trying to lower them.

The additional transparency is the result of a law former Gov. Chris Christie signed last March that requires the DCA to include information about the state’s most popular tax-relief programs. That law, which Christie originally vetoed in 2014, was prompted by his administration’s decision to remove from the tax tables DCA posts each year on its website information on the average Homestead benefit and the net average property tax by municipality. NJ Spotlight had brought that removal to light in attempting to report on changes in the net property tax following cuts Christie made to the Homestead benefit.

2017 Property Tax Information
2017 Property Tax Information

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That information is back, and much more. The tables released last Friday by DCA show not only how much each municipality levied in property taxes, the average home assessments, and the average tax bill in each community in 2017, but also how many people got a Homestead benefit and the average value and data on a number of other state property-tax relief programs that go directly to home owners. The department has added the same information to the 2016 tax tables, originally released in February of 2017 without it.

Senior Freeze

It shows, for instance, that the most expensive state-funded program in 2016 was not the Homestead Credit, but the Senior Freeze Reimbursement, which cost nearly $204 million and represented slightly more than half of the total amount the state paid through the programs.

Senior Freeze, which took effect in 1997, uses state-funded reimbursements to effectively freeze property-tax bills for seniors. Last year, according to the DCA database, nearly 165,000 seniors received an average $1,235 through the program. To qualify, a home owner must be at least 65 or disabled, have lived in the state for at least a decade, and in their current home for the last three. There is also an income gap, which itself has been frozen for several years at $70,000 a year. In fact, 3,000 fewer homeowners qualified last year than in 2016, and while the average reimbursement rose by $20, the state saved about $800,000 in 2017 compared with the year before.

Homestead credit

The Homestead Credit, which was once a rebate check, used to be the most expensive relief program, but has been cut back drastically. In 2007, the state budgeted $2 billion for the rebates, and homeowners with incomes as high as $250,000 were eligible. Now, the typical homeowner can have no more than $75,000 in income – $150,000 for seniors and the disabled. Last year, the state spent some $145 million on the program, giving about 600,000 taxpayers an average $241 credit on their property-tax bills. That’s less than half of what the state spent just a year earlier: In 2016, close to 700,000 got an average $471, for a total $329 million.

Despite the cutbacks, an analysis of the effects of these programs, which have income caps or target seniors, veterans, and the disabled, shows that they had the greatest effect in municipalities that had average tax bills significantly less than the state average – $8,690.
In three communities, Audubon Park in Camden County, Winfield in Union, and Downe Township in Cumberland, the total amount of deductions and credits given to seniors, veterans, the disabled, and those with incomes below $75,000 who owned homes represented at least 5 percent of the municipality’s total tax levy. The highest average property tax in that group was paid by homeowners in Winfield, though that $3,530 bill was still just 40 percent of the state average.

Average tax bills varied widely throughout the state, ranging from a high of $31,415 in tiny Tavistock in Camden to just $1,277 in Walpack in Sussex County.

Use our searchable database to find property-tax and credit data for all the municipalities in New Jersey.