Overview of New Jersey Taxes
Homeowners in the New Jersey pay the highest property taxes of any state in the country, with rates in some areas more than double the national average. The average effective property tax rate in New Jersey is 2.19%, 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 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 this in mind: homeowners in the Garden State pay the highest property taxes of any state in the country, with rates in some areas more than double the national average.
The average effective property tax rate in New Jersey is 2.19%, compared with a national average of 1.19%. When combined with the relatively high property values in New Jersey, that means the average property tax paid in New Jersey is around $7,000.
Don’t let the high property taxes scare you away from buying a home in New Jersey! If you are looking to refinance or purchase a property in the Garden State and plan on using a mortgage, check out our mortgage guide for information about New Jersey mortgage rates and other details.
How New Jersey Property Taxes Work
Property taxes in New Jersey go entirely to local governments; the state does not get a slice of the pie. Bills are paid in four annual installments, on the first of February, May, August and November. The amount a homeowner in New Jersey pays depends primarily on two factors: 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, and have incentives to undervalue property in their own district, the state Division of Taxation annually determines an equalization ratio to ensure that everyone in a tax district pays their fair share.
So, for example, the City of New Brunswick had a 2014 ratio of 38.72. That means assessed values were 38.72% of true market value. To calculate true value in New Brunswick (and the value used for county taxes), a homeowner would multiply his or her assessed value by 1/(0.3872).
New Jersey Property Tax Rates
Property tax rates in New Jersey vary significantly by city and county. Separate rates are determined by municipalities, counties and school districts, and additional rates may be applied 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 annually paid as a percentage of home value.
An average effective tax rate presents an indication of the overall level of taxes in an area, but is 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 $9,373, highest in the state, and more than four times the national average.
The average effective property tax rate in Bergen County is 2.08%, which ranks among the lowest in the state. However, in the county’s largest municipalities the rate is higher. In Hackensack, for example, the 2014 effective rate was 3.089%.
Middlesex County is part of the New York City metropolitan area. The county’s average effective property tax rate is 2.11%. In Edison, which is the county’s largest city, the rate is even higher. The effective rate in 2014 was 2.346%.
Located in northern New Jersey, between Middlesex and Bergen counties, Essex County has among the highest property tax rates of any county in the state. The average effective property tax in Essex County is 2.51%. That ranks as the fourth highest rate in the state, and among the 50 county averages of the more than 3,100 counties in the country. In many municipalities the rate is higher than that. In Newark, for example, the effective rate is 2.743%.
With around 650,000 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 2.10%. At that rate, the taxes on a home worth $300,000 would be $6,300 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, at 1.95%. In some municipalities, however, the rate is higher. In Middletown, the effective tax rate for tax year 2014 was 2.111%. In Howell, the rate was 2.322%.
If you want to buy beach front property with relatively low property taxes in New Jersey, Ocean County may be the place to start your search. The average effective tax rate in the county is 1.78%, second lowest in the state. Likewise, the median annual property tax payment in the state is $4,784, 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 2.37%, 10th highest in the state. A homeowner paying that rate on a home worth $350,000 would pay about $8,295 annually.
Buying a home in Camden County? Bad news: the county’s property tax rates are not only the highest in the state, they are also among the highest nationally. The county’s average effective property tax rate is 2.94%, a number topped by fewer than 20 counties in the U.S.
This northern New Jersey county has effective property tax rates that are more than double the national average. The county’s average effective property tax rate of 2.48% ranks second in the state.
In the city of Passaic, the effective rate is 3.046%. 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 43.94%, which means that assessed values are about 44% of actual values. Thus, listed rates (which apply to assessed values) are more than double the effective tax rates.
The median annual property taxes paid by homeowners in Morris County is $8,651, more than four times the national median. By New Jersey standards, however, property tax rates in Morris County are not especially high. The county’s average effective property tax rate is 2.00%, slightly lower than 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