New Jersey has the highest property taxes in the United States, by a wide margin. The average NJ homeowner pays around $9,500 per year, more than double the national average, and in many of the counties I serve the number is significantly higher.

For a buyer, that makes property taxes a core part of the monthly payment. Lenders count them in your debt-to-income ratio, and you pay them every month for as long as you own the home. Knowing the real number before you make an offer can decide whether a home fits your budget at all.

The short version: The average NJ homeowner pays around $9,500 a year in property taxes, and lenders count that bill when they decide what you can borrow. Compare the dollar amount for the specific home, not the county rate: a $400K home in Passaic at 2.18% carries a lower bill than a $731K home in Bergen at 1.61%. Get the exact tax bill for every home you consider, and make sure your lender uses it in your pre-approval.

Why NJ property taxes are so high

New Jersey funds its schools, municipal services, and county government almost entirely through property taxes, with little of the state revenue sharing other states rely on. NJ also has 565 separate municipalities, each running its own government. That is an expensive model, and property owners carry it.

Your tax bill has three parts:

Municipal tax, which funds local government services
School tax, which funds K-12 public schools and is usually the largest portion (often 60–65% of your total bill)
County tax, which funds county-level services

How property tax is calculated

Your annual tax bill is your assessed value multiplied by your town's tax rate.

In New Jersey, property is supposed to be assessed at 100% of its true market value. In practice, assessments often lag behind sale prices, especially in rising markets. That's why the effective tax rate, which compares your actual tax bill with the home's current market value, is the most accurate way to compare tax burdens across counties:

Effective rate = annual tax bill ÷ current market value

Property tax rates across the 12 counties I serve

These estimates use effective rates and median sale prices from Redfin data, with figures as of January 2026.

County	Effective Rate	Median Sale Price	Est. Annual Tax	Est. Monthly
Hudson	1.77%	$699,000	$12,373	$1,031
Bergen	1.61%	$731,000	$11,769	$981
Essex	1.91%	$665,000	$12,702	$1,058
Middlesex	2.10%	$520,000	$10,920	$910
Union	1.89%	$640,000	$12,096	$1,008
Mercer	2.36%	$450,000	$10,620	$885
Morris	1.72%	$689,000	$11,851	$988
Somerset	1.81%	$575,000	$10,408	$867
Passaic	2.18%	$563,000	$12,273	$1,023
Monmouth	1.65%	$710,000	$11,715	$976
Ocean	1.65%	$462,000	$7,623	$635
Burlington	2.26%	$380,000	$8,588	$716

Note: Estimated annual tax = effective rate × median sale price. Your actual bill depends on your specific property's assessed value and the current tax rate in your municipality.

Hudson, Essex, and Passaic carry the highest dollar tax bills despite their different rates, because home prices there are high. Passaic has both a high rate and significant home values, which gives it one of the heaviest tax burdens in the region.

Ocean and Burlington have the lowest dollar amounts. Ocean pairs one of the lowest effective rates (1.65%) with a lower median price. Burlington has one of the higher rates (2.26%), but its lower median sale price keeps the dollar bill down.

Bergen has the lowest effective rate of any county I serve (1.61%), yet because homes there are expensive, the bill still comes to close to $12,000/year.

Compare the dollar amount, not the rate

The mistake I see buyers make most often is focusing on the tax rate instead of the actual dollar amount.

A buyer moving from Bergen County (1.61%) to Passaic County (2.18%) might expect much higher taxes in Passaic. But on a $400K home in Passaic and a $731K home in Bergen, the Passaic bill ($8,720/yr) is lower than the Bergen one ($11,769/yr).

Run the dollar amount for the specific property you're considering, and set the county average aside.

Why rates vary between towns in the same county

The county figures above are averages, and the rate can vary dramatically from town to town. In Essex County, for example:

Millburn: effective rate ~1.3% (high property values spread the levy across a large tax base)
Newark: effective rate ~3.5%+ (lower property values, higher municipal costs, more services funded)

Two towns in the same county can be 2%+ apart in effective rate. That's how a $500,000 home can have a $6,500 annual tax bill in one town and a $17,500 bill in the next. When you compare homes, look up the specific tax bill on the listing or ask your agent.

What lenders include in your monthly payment (PITI)

When you get pre-approved, lenders calculate your monthly payment as PITI: principal (paying down your loan), interest (the cost of borrowing), taxes (property taxes, escrowed monthly), and insurance (homeowners insurance, escrowed monthly).

In NJ, the T in PITI is enormous compared to other states. On a $699K home in Hudson County, property taxes add $1,031/month on top of your mortgage payment. On a $550K home financed at 6.5% with 20% down, principal and interest come to about $2,781/month, and taxes push the total to $3,800+ before insurance.

This is why NJ buyers often qualify for less than they expect. The tax burden reduces your purchasing power compared with states like Texas, where property taxes are also high but home prices are lower, or states like Florida and Hawaii, where tax rates are moderate to low.

Property tax exemptions: do you qualify?

New Jersey offers several exemptions that can reduce your annual bill.

ANCHOR (which replaced the Homestead Benefit)

The Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) program makes direct payments to homeowners. In prior years, homeowners earning up to $150,000 received $1,500 credits, and those earning $150K–$250K received $1,000. The Legislature sets benefit amounts each year and they may change, so confirm the current year's benefit and eligibility at nj.gov/treasury/taxation before relying on these figures.

Senior Freeze (Property Tax Reimbursement)

Homeowners who are 65+ (or disabled) and have lived in NJ for 10+ years may be eligible for reimbursement of property tax increases above their base year. This freezes their effective tax liability for as long as they qualify.

Veterans Deduction

Veterans who served honorably during a period of war receive a $250/year deduction. Veterans who are 100% disabled may receive a full exemption on their primary residence.

Senior/Disabled Deduction

Seniors 65+ or permanently disabled residents with income under $10,000 (excluding Social Security) receive a $250 annual deduction.

StayNJ

StayNJ is a newer program aimed at cutting property taxes for residents 65+, phasing in around this period. Confirm current eligibility at nj.gov/treasury/taxation.

How to appeal your property tax assessment

You can appeal if your home is over-assessed, meaning the assessed value is higher than what you could actually sell it for. NJ allows annual assessment appeals, and a successful appeal reduces your assessment for that tax year. Under NJ's Freeze Act, the reduced assessment may also carry forward for up to two more years if certain conditions are met.

An appeal makes sense when:

Your assessment is higher than recent comparable sales in your neighborhood
Your home has deferred maintenance or issues that lower its market value
You recently purchased at a price lower than the assessed value

Appeals are filed with your County Board of Taxation by April 1 each year. The deadline moves to May 1 if your municipality completed a revaluation or reassessment that year, and it falls around January 15 in Monmouth, Burlington, and Gloucester counties. You'll need comparables (recent sales of similar homes) to support your case. A qualified NJ tax appeal attorney or CPA can handle the appeal for a percentage of the savings, and I'd use one for any appeal involving significant tax liability.

If your assessment is clearly out of line with recent sales, an appeal can lower it, and your bill drops with it. It's worth checking in your first year after purchase.

How to budget for property taxes

This is the advice I give every buyer:

Get the exact tax bill, not the estimate. The MLS listing shows last year's tax bill, so confirm it's current. Bills change when properties are reassessed or municipal rates change.
Put it in your monthly budget from day one. With 20%+ down and no escrow, you'll pay taxes directly in four quarterly installments, due February 1, May 1, August 1, and November 1. Many buyers are shocked by a $2,500–$3,000 quarterly bill they weren't saving for.
Escrow it. Most buyers with a mortgage escrow taxes automatically: your lender collects 1/12 each month and pays the bill when it's due. If you have the option, this is the easiest way to manage it.
Budget for increases. NJ municipalities reassess and adjust rates annually. As a rule of thumb, assume your tax bill will increase 2–3% per year, and build that into your long-term budget.
Compare towns as well as homes. A home that's $30,000 cheaper in a higher-tax town might cost you more each year than the pricier home in a lower-tax town once you count the taxes over time.

Before you make an offer

High property taxes come with buying in NJ, and you can't plan your way around them. They fund public schools and local services, and NJ homes have seen strong property value appreciation over time.

What you can control is going in with the real number. Know the exact tax bill for every home you consider, include it in your full monthly payment, and make sure your lender uses that bill in your pre-approval instead of a ballpark estimate.

I run these numbers for every buyer I work with before they make an offer. If you want to talk through the tax picture for a specific town or county, reach out or book a free call.

NJ Property Taxes Explained: What Every Buyer Needs to Know