Overview of New Jersey Taxes
Homeowners in New Jersey pay the highest property taxes of any state in the country. Rates in some areas are more than double the national average. The average effective property tax rate in New Jersey is 2.40%, compared with a national average of 1.19%.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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New Jersey Property Taxes
Thinking about a move to New Jersey? Keep in mind that homeowners in the Garden State pay some of the highest property taxes in the country. Rates in some areas are more than double the national average.
The average effective property tax rate in New Jersey is 2.40%, compared with a national average of 1.19%. When combined with the relatively high property values in New Jersey, the average property tax payment in New Jersey is more than $7,500.
Don’t let the high property taxes scare you away from buying a home in New Jersey. If you are looking to purchase a property in the Garden State or if you want to refinance your current mortgage, check out our mortgage guide for information about New Jersey mortgage rates and other details.
Looking to calculate your potential monthly mortgage payment? Check out our mortgage calculator.
How New Jersey Property Taxes Work
Property taxes in New Jersey go entirely to local governments. Bills are paid annually across four installments, which are due on the first of February, May, August and November. The amount a homeowner in New Jersey pays depends primarily on the value of his or her home and the total tax rates among all local tax authorities.
Home value is determined by assessors in New Jersey’s 565 municipalities. Since these assessors may use different techniques, it’s possible that they undervalue or overvalue homes in their district. The New Jersey Division of Taxation offsets this annually by determining an equalization ratio that ensures everyone in a tax district pays their fair share.
So, for example, the City of New Brunswick had a 2017 ratio of 99.65. That means assessed values were 99.65% of true market values. To calculate true value in New Brunswick (which is the value used for county taxes), a homeowner would multiply his or her assessed value by 1/0.9965.
New Jersey Property Tax Rates
Property tax rates in New Jersey vary significantly by city and county. Municipalities, counties and school districts all determine their own rates. There may also be additional tax rates that apply for specific purposes such as parks or libraries.
Since assessed values in one city are not necessarily equivalent to assessed values in another, it is useful to look at effective tax rates. The effective tax rate is the amount paid annually as a percentage of home value.
An average effective tax rate presents an indication of the overall level of taxes in an area, but it’s not used to actually calculate individual tax bills. The table below shows the average effective tax rate for every county in New Jersey.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
A combination of high property tax rates and high home values in northeast New Jersey’s Bergen County means that nearly half of the county’s residents pay $10,000 or more annually in property taxes. The county’s median annual property tax payment is $9,908, highest in the state, and more than four times the national average.
The average effective property tax rate in Bergen County is 2.23%, which actually ranks among the lowest in the state. However, in the county’s largest municipalities, the rate is higher. In Hackensack, for example, the effective rate is 2.71%.
Middlesex County is part of the New York City metropolitan area. The county’s average effective property tax rate of 2.31% is slightly less than the state average. In Edison, which is the county’s largest city, the rate is even a bit lower. The city’s effective rate is 2.29%.
Located in northern New Jersey, between Middlesex and Bergen counties, Essex County has the third highest property tax rates in the state. The average effective rate in Essex County is 2.76%. That also ranks among the 30 highest county averages in the U.S. Rates within Essex County vary by municipality. In Newark, for example, the effective rate is 2.56%.
With around 670,000 residents, Hudson County is the fourth most populous county in New Jersey. Property tax rates in Hudson County are close to state average. The countywide average effective rate is 2.33%. At that rate, the taxes on a home worth $300,000 would be $6,990 per year.
Situated along the Atlantic Coast in central New Jersey, Monmouth County has the third lowest average effective property tax rate of New Jersey’s 21 counties. The rate is just 2.05%. Again, municipalities within the county will have different rates. In Middletown, the most populous city in the county, the effective tax rate is 1.96%. In Howell, the rate is 2.37%.
If you want to buy beach front property with relatively low property taxes in New Jersey, Ocean County may be the place. The average effective tax rate in the county is 1.96%, second lowest in the state. Likewise, the median annual property tax payment in the county is $5,177, about $2,400 less than the state average.
Union County is located northwest of Staten Island, in the New York City metropolitan area. It is the seventh most populous county in New Jersey. The average effective property tax rate in Union County is 2.65%, fourth highest in the state. A homeowner paying that rate on a home worth $350,000 (about the median home value for the state) would pay about $9,275 annually.
Buying a home in Camden County? Bad news: the county’s property tax rates are highest in the state and third highest in the U.S.. The county’s average effective property tax rate is 3.33%.
This northern New Jersey county has effective property tax rates that are more than double the national average. The average rate in the county is 2.79%. That ranks second in the state and 23rd in the country (out of 3,100 counties).
In the city of Passaic, the effective rate is 3.08%. If you own a home in Passaic, don’t be surprised to see a much higher rate than that listed on your property tax bill. The city has an assessment ratio of 86.07% for 2017. That means assessed values are only about 86% of actual values.
The median annual property taxes paid by homeowners in Morris County is $9,122, more than four times the national median. By New Jersey standards, however, property tax rates are not especially high in Morris County. The average effective property tax rate is 2.13%, well below the state average.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we calculated the average math and reading/language arts proficiencies for all the school districts in the country. Within each state, these schools were then ranked between 1 and 10 (with 10 being the best) based on those average scores.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2016 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites