The highest property-tax state in the country intends to reduce those taxes by up to 50% for nearly all homeowners who are 65 and older.
New Jersey Gov. Phil Murphy, flanked by state Assembly Speaker Craig Coughlin and state Senate President Nick Scutari at a live-streamed press conference, announced Wednesday that they reached an agreement to cut property taxes by up to $6,500 a year for senior citizens earning $500,000 or less. That maximum benefit will be indexed to future increases in property-tax bills.
Murphy said the tax cut would not be fully implemented until 2026 because the program is complex and the state needs time to work out the details. The state will form a commission, including three members appointed by Murphy and three by the Legislature, that will make recommendations by May 2024 on how the new StayNJ program will be implemented. The commission will also be charged with simplifying and aligning the state’s Anchor and Senior Freeze tax programs.
In the interim, starting in 2023, senior homeowners and renters who qualify for the state’s Anchor property tax relief program will get another $250 in aid. Senior homeowners will see their benefit increase to $1,750 and renters, to $700, a year. Currently, New Jersey homeowners with an income of $150,000 or less can receive up to a $1,500 payment to offset property taxes, while renters who meet that income requirement get $450. Homeowners earning more than $150,000 but not more than $250,000 get $1,000.
The cost for boosting aid through the Anchor program this year is expected to be an additional $140 million. The New Jersey leadership has committed to keeping $100 million, $200 million, $300 million, respectively, aside over the next three fiscal years to offset the total cost for the first full year of implementing StayNJ.
According to the nonprofit Tax Foundation, New Jersey ranks no. 1 on property taxes among states. High property taxes have been a perennial issue in New Jersey for decades. The tax cut for those 65 and older agreed upon by Murphy and New Jersey’s Democratic leadership was hailed by them as “historic” and is certainly one of the largest in the state in recent times.
Many states do have tax relief programs or exemptions for senior citizens. Overall, states have been working to cut various taxes for residents and businesses. In fact, states implemented dramatic rate reductions and reform in 2021 and 2022, and more have reduced rates this year. A number of states also offer property tax freezes.
In high-tax states like New Jersey, property taxes are often a reason that older residents who have retired look to move to cheaper and warmer areas, particularly in the South. Florida has long been an attractive destination. South Carolina, and even Vermont, have also become attractive alternatives. In 2022, for the fourth year in a row, New Jersey was the no. 1 most popular state to move away from, said United Van Lines.
“We’ve made it our mission to address affordability in the state of New Jersey,” Coughlin said at the press conference. “Seniors who have done so much for our state should have the freedom to remain in their homes, near the people they love and the communities that they built. StayNJ will dramatically cut property taxes for 97% of senior homeowners.”
Coughlin had originally proposed a program that would have cut taxes for seniors by up to $10,000 and included no income limit. However, Murphy said he would not agree and wanted some benefit for renters. On June 18, the New Jersey Globe ran an article saying a compromise was reached, allowing the state Legislature to have a path to pass a budget by the end of June.
