When it comes to owning a home in New Jersey, there’s a lot to love—coastal towns, charming suburbs, vibrant cities, and top-tier public schools. But for all its advantages, one area where the Garden State continues to stand out is property taxes. In 2024, New Jersey ranked among the top two states in the country for the highest property tax rates on single-family homes, coming in just behind Illinois.
New Jersey Property Tax Rate: What Homeowners Are Facing
In 2024, New Jersey’s effective property tax rate was 1.59%, positioning it as the second-highest in the nation. That means for every $100,000 of home value, homeowners in New Jersey are paying roughly $1,590 annually in property taxes. While that rate may sound steep, it reflects the state’s heavy reliance on local property taxes to fund essential services like public schools, municipal operations, and emergency services.
How New Jersey Compares Nationwide
While New Jersey continues to lead the nation in property taxes, it’s important to view the broader landscape. Illinois topped the list with a 1.87% rate, while other high-tax states included Connecticut (1.48%), Nebraska (1.32%), and Ohio (1.31%). On the other end of the spectrum, Hawaii offered the lowest rate at just 0.33%, with other low-tax states like Idaho, Arizona, Alabama, and Delaware staying below 0.45%.
The national average for property taxes on single-family homes in 2024 rose to $4,172—an increase of 2.7% compared to 2023. Interestingly, that uptick is more modest than the 4.1% rise seen from 2022 to 2023, suggesting some stabilization in the market despite overall home price appreciation.
Why Are New Jersey Property Taxes So High?
There are a few key reasons why property taxes in New Jersey remain among the highest in the U.S.:
- Local School Funding: New Jersey ranks among the top states in per-pupil education spending. With strong investment in public education, a significant portion of local taxes goes directly into schools.
- Home Values: Higher home values in parts of New Jersey, particularly in desirable commuter suburbs and coastal towns, naturally result in higher tax bills.
- Fragmented Municipalities: With more than 560 municipalities across the state, each town manages its own local services—many with their own school districts, police departments, and administrative costs. This creates duplication and increases the overall tax burden.
- Limited State Aid: While New Jersey provides state aid to local governments, it has not always kept pace with the rising cost of services, leaving local taxpayers to cover the difference.
What This Means for Homebuyers and Investors
For anyone considering buying a home in New Jersey, property taxes are a critical factor to weigh alongside mortgage payments and insurance. High taxes may increase the long-term cost of homeownership, but they also contribute to well-maintained infrastructure, highly ranked schools, and safe neighborhoods—all elements that support long-term property value.
Investors and first-time homebuyers alike should take a close look at property tax rates on a local level. In New Jersey, rates can vary significantly from one town to the next. For example, a community with strong commercial tax revenue may offer lower residential rates than a primarily residential suburb.
Final Thoughts: Navigating New Jersey’s Tax Landscape
While New Jersey’s property taxes are undeniably high, many residents view them as a worthwhile investment in quality of life. From excellent schools to responsive local services and a strong sense of community, there’s more to the story than just numbers. For those looking to explore, relocate, or invest in New Jersey, understanding the property tax structure is an essential step in making informed, confident decisions.
Whether you’re settling into a leafy North Jersey suburb, a coastal enclave along the Shore, or a commuter-friendly town near New York City, it’s crucial to factor taxes into your budget and long-term plans.
