You’re not the only person who has experienced a little sticker shock when investigating property taxes in New Jersey. New Jersey is a highly convenient place to enjoy smaller communities and access big East Coast cities. New Jersey invests one of the highest percentages of any state in its schools, which make New Jersey public schools attractive options for many growing families. Property taxes also pay for emergency services, road maintenance, garbage, and libraries.
New Jersey Property Taxes
It can be daunting to approach the topic of property taxes in New Jersey. Many people are aware that property taxes in New Jersey are relatively high but need to figure out their alternative options or the best way to maximize their tax savings while owning a home in New Jersey. Variability between municipalities contributes further to confusion. We’ve focused on the property tax rates for Frenchtown, NJ specifically, because Country Classics is selling our final few new homes in Frenchtown at the moment, so we’re well-versed in the specifics of this municipality. However, most of the conversation relates to the entire state of New Jersey.
The average homeowner in Frenchtown, NJ, pays a yearly average of $9,729 in property taxes. Relative to other municipalities in New Jersey, Frenchtown’s general tax rate of 3.696 is slightly higher than the median. If you’re interested in estimating your New Jersey property taxes for another municipality, we love this calculator, which uses your location and your home’s value to estimate your property taxes.
New Jersey has an additional 1 percent tax, colloquially known as the “mansion tax,” on properties sold over $1 million. The mansion tax is not tax deductible.
What is the New Jersey PILOT program?
One method of New Jersey Tax relief is the PILOT program, or “Payment in Lieu of Taxes,” program that incentivizes new construction. This significantly reduces the tax burden for more than a decade after you purchase a new home. Below the first year you've moved into your new home, you will owe 50 percent of typical taxes on a property in your municipality with your property’s typical taxes. If you take Country Classics at Frenchtown Pilot every year, you will pay 2 percent more than the following year until year 11. You pay 12% more in year 12, and your property taxes return to parity with your neighbors in year 13.
If you have questions about building a home in New Jersey, Country Classics has you covered. We’ve created an extensive list of frequently asked questions we hear from clients before we decide to work together and during the process of building a home.
Ways to Get a Property Tax Credit in New Jersey
There are several ways to save on property taxes. Your New Jersey property taxes are tax deductible. The amount you pay in property taxes reduces your taxable income by that amount or $15,000, whichever is less.
Take advantage of every tax break you qualify for if you itemize deductions. Depending on your income, you may be eligible for a rebate or tax credit on a percentage of the first $10,000 of last year’s taxes on your primary residence. If you are a senior, blind, receive state disability assistance, or are a veteran, you may also qualify for additional tax credits.
You can reduce your property tax burden by appealing your property assessment if you believe your current valuation is too high. Reducing your property’s assessment means you pay the same percentage of a lower number when your tax bill is calculated. If you feel your home’s assessed value is unreasonable compared to the market standard, appeal your New Jersey property’s assessment here.
Tax Benefits of Owning a Home in New Jersey
It still makes much more sense to buy rather than rent. It is still far cheaper to buy a home in New Jersey than it is to rent one. Though mortgage rates have slightly increased, rent in the area has increased further, with the average New Jersey rent rising more than $300 in the past year.
Owning a newer home could mean a higher tax bill. Still, it reduces the probability of other significant cash outlays associated with homeownership, such as major repairs, which may keep you spending less in the long run.
Benefit from the PILOT Program when you purchase a Country Classics Home
Building a home in Frenchtown, New Jersey, provides you with a thriving community and a fantastic array of amenities. Our homes in Frenchtown and other great areas in New Jersey allow you to realize significant and sustained tax savings while building your dream home. We’d love to talk to you about your plans and priorities and our options. We cannot wait to match you with the perfect home in Country Classic’s portfolio.
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