New Jersey Property Tax Calculation

As of 2011, the state of New Jersey has 566 taxing districts and 21 counties.

New Jersey uses an ad valorem real property taxation method where homeowners pay property taxes based on their property values. Tax assessors use standard fair market measures to determine each homeowner's true value of their homes in a competitive market. The state government does not receive any portion of local community property taxes, based on the concept of "home rule."

Ad Valorem Assessment Method

Under New Jersey law, tax assessors use a standard measure of valuation to determine true value. True value, according to the state's legal definition, is what a willing and knowledgeable purchaser would pay for the property if it were available for sale. Tax assessors use Oct. 1 before the tax assessment date to determine the market value as of Oct. 1. For farmland, tax assessors use market value based on the landowner's production capabilities for producing crops.

Standards for Valuation

The tax assessor uses current market trends based on completed construction and improvements as of Oct. 1. For subsequent improvements and alterations, county assessors use the "added assessment law" and prorate the homeowner's added assessment taxes. For homeowner's additions between Jan. 1 and Sept. 30, tax assessors valuate the assessment value as of the first day of the month after the homeowner completes the renovation or alteration.

County True Value Percentages

All 21 counties in the state use a 100 percent true value assessment rate. County budgets determine how much the county needs to collect through property taxes to fund local community and public education programs. The county bases its budgetary needs on the amount its local municipalities and school districts need to fund their own programs. The county tax authority divides the budget amount by the total assessed value of all property within the county's jurisdiction. The county then calculates each homeowner's tax liabilities by multiplying the county's general tax rate by the homeowner's assessed property value.

Tax Bills and Appeals

Tax bills are due on the first day of February, May, August and November, in four equal installments. New Jersey allows qualifying homeowners to take advantage of its tax relief programs, allowing them to reduce their tax liabilities. The state's homestead programs provide qualified veterans, senior citizens and low-income disabled residents with a tax deductions ranging from $250 to complete tax relief. The state also offers abatement programs for qualifying tax-exempt homes. Taxpayers can appeal their property assessments by filing an appeal with their county tax board. Taxpayers with assessments over $1 million may file an appeal directly with the New Jersey Tax Court. Taxpayers must file their appeals by April 1 or within 45 days from the assessment notices. Some municipalities allow taxpayers to file appeals by May 1.

Considerations

Since tax laws can frequently change, you should not use this information as a substitute for legal or tax advice. Seek advice through a certified accountant or tax attorney licensed to practice law in your jurisdiction.

References

• New Jersey: General Property Tax Information
• New Jersey: How Property Is Valued for Property Tax Purposes
• New Jersey Property Tax Benefits