Average Property Tax in New Jersey

New Jersey has consistently been a front runner for the highest property taxes assessed in the United States. The average property tax bill for New Jersey residents was $8,353 in 2015. This was a 2.4% increase from the $8,161 average tax in 2014. A high 89% of municipalities in New Jersey reported an increase in property tax assessments from 2014 to 2015. Property taxes make up 48% of all state and local taxes collected in New Jersey, which indicates that New Jersey relies heavily on property taxes to fund local governments. This is the second-highest percentage in the nation, with only New Hampshire, at 63%, relying more heavily on property taxes.

New Jersey Cities/Counties With Highest Rates

Essex County experienced the highest property tax assessments in 2015, as the average levy was $11,247. Bergen County’s average collection was $11,078, while Union County had an average property tax bill of $10,251. Cumberland County had the lowest average property tax assessment in 2015. Although its average bill was only $3,921, Cumberland County’s average assessment increased 3.3%. Burlington County’s assessment had the highest change from 2014 to 2015, as the average levy increased 3.8%.

How New Jersey Compares to Nearby States

New Jersey’s neighboring states have very different property tax policies. For instance, New York’s 2016 average property tax rate of 1.58% is the 11th-highest in the United States. Another neighbor, Pennsylvania, imposes a property tax rate of 1.51%. However, Delaware’s property tax levy of 0.58% is the fourth lowest in the nation. Two other close states, Massachusetts and Maryland, impose property tax rates of 1.18% and 1.08%, respectively. These two states assess property taxes approximate to the median rate in the United States. Therefore, there is little consistency regarding the property tax rates in New Jersey’s geographic region.

How New Jersey Compares to the National Average

On average, New Jersey levies the highest property tax rates in the United States. The average assessment is 1.89% of the property value, which is the highest in the nation. This average assessment equates to 7.45% of an individual’s annual income, which is also the highest in the nation. The 2015 median property tax paid in New Jersey was $6,579, which again topped the amount paid nationwide. New Jersey’s 2016 effective property tax rate of 2.29% leads the nation as well.

Why Are New Jersey’s Rates the Highest in the Nation?

Although New Jersey only has 21 counties, the state has 565 municipalities with their own support staff, which requires funding. Property taxes levied in New Jersey support municipal services, such as police and road maintenance. They also support regional public schools, county government, parks, elections, library service and fire service taxes. State support covers only 15% of municipality expenses, and the average cost to operate the local governments within New Jersey has increased 44.3% from September 2000 to September 2012. Meanwhile, the budget allocations for municipality tax relief programs decreased 18.4% from 2001 to 2011. New Jersey implements a very high property tax rate because it is the almost-exclusive funding source for municipalities.

Funding for schools is another reason as to why the property tax rates in New Jersey are so high. Only one-third of school spending is covered by state support, with the majority of this cost going toward salaries and benefits. For example, in 2014, the average cost per pupil in New Jersey public schools was $15,257. Of this amount, $13,064 went toward staff base pay and benefits. The 2014 budget allocated 25% of resources to directly aid New Jersey's public schools. New Jersey is celebrated for having one of the most progressive and generous school funding systems, and this is made possible through heavy property tax levies.

New York Property Tax Guide

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