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The average 2019 property tax bill in New Jersey was nearly $9,000, according to data from New Jersey’s Department of Community Affairs.
And many Garden State homeowners paid much more than that average. In Tavistock Borough, where the average residential property value tops $1.7 million, homeowners paid $29,890 in property taxes, on average, according to the state. The lowest average amount was in Camden, where average home values of $56,763 played out with property tax bills averaging $1,728.
Wherever your property taxes fall in that range, the NJ homestead rebate program is intended to provide property tax relief for eligible New Jersey homeowners. Let’s look at how the program typically works.
- What is the NJ homestead rebate program?
- Who’s eligible for the program?
- How much is the rebate worth?
- How can I get the rebate?
- Is other New Jersey property tax relief available?
- How has COVID-19 affected the NJ homestead rebate program?
What is the NJ homestead rebate program?
The New Jersey homestead rebate is a property tax credit that the state pays to municipalities on behalf of eligible homeowners to help reduce their property tax bills.
Most people who qualify for the rebate will get it as a credit on their property tax bills, issued by their local tax collector. That means that if you qualify for it, the credit will directly reduce the amount of property tax you must pay.
Though if you qualified for the credit but sold your house before you filed to receive the rebate, or your home was a unit in a co-op or continuing-care retirement community, you might receive the rebate as a check or direct deposit payment instead.
The program generally runs a few years behind. So even if you qualify and file in one year, it’ll be a couple of years before the credit shows up on your property tax bill.
Bad news for 2017 filers who qualified though: New Jersey has frozen funding for 2017 payout of the homestead rebate program in response to the COVID-19 pandemic. You can read more about the impact of the coronavirus on the NJ homestead rebate program below.
Who’s eligible for the program?
To get the credit, you need to be a New Jersey resident and meet other eligibility requirements, including …
- You owned a house in New Jersey and lived in it as your primary residence on a specific deadline for each year’s credit. For 2017, that deadline was Oct. 1, 2019.
- The home was your principal residence, not a vacation or second home, or one you rented out.
- You paid property taxes on that home. You’re not eligible for the rebate if you were exempted from property taxes for any reason.
- Your 2017 income was $150,000 or less if you were 65 or older, or blind or disabled.
- Your 2017 income was $75,000 or less if you were younger than 65 and not blind or disabled.
How much is the rebate worth?
The state calculates homestead benefit amounts — and the formula can look a bit complicated. Let’s simplify it.
- Rebate amounts are generally a percentage of the property taxes you paid for a specified year.
- That specified year is currently 2006 — former Gov. John Corzine set 2006 as the baseline year for calculating the rebate years ago, and it hasn’t changed since.
For the rebate on your 2017 property taxes …
- You would have applied for the rebate in 2019.
- You’d then be getting the credit against your 2020 property tax bill, if you qualified. But remember, the program is currently frozen.
- Eligible seniors (or disabled people) with New Jersey gross income of up to $100,000 would get a credit worth 5% of their 2006 property taxes. Those making over $100,000 up to $150,000 could get a 2.5% credit. And seniors or disabled people weren’t eligible for any credit if they made more than $150,000.
- For people younger than 65, the credit amounts were 5% for income of $50,000 or less and 3.335% with income of more than $50,000 but not over $75,000.
- Homeowners with income of more than $75,000 couldn’t get the credit at all.
These income limits apply to single people and married or civil union couples living in the same house, and to married or civil union partners living in separate homes.Learn how property tax relief works
How can I get the rebate?
If your New Jersey gross income meets eligibility requirements for the credit, the state will mail you information that you’ll need in order to apply for the rebate. You’ll need to apply by a certain deadline. The filing deadline for the 2017 tax year benefit was Dec. 2, 2019.
You can either apply online or by calling 1-877-658-2972. And in certain situations, you may have to file a paper application.
To apply, here’s the info you’ll typically need to provide.
- Your home’s identification number and PIN, which will be included in the filing information you received from the state
- Your Social Security number (and your spouse’s if you’re married)
- Your date of birth (and your spouse’s if you’re married)
- Your gross income for the year you’re trying to qualify for (as listed on your New Jersey tax return for that year)
- The filing status you used on that same tax return
Is other New Jersey property tax relief available?
The NJ homestead rebate program can provide property tax relief to lower-income homeowners. But the state also makes additional property tax relief programs available to certain groups.
- Qualifying homeowners who are 65 and older, or who are disabled, can get up to $250 deducted from their property tax bills.
- Qualified veterans can also get an annual deduction of up to $250.
- Certain veterans who are totally and permanently disabled may be exempted from paying property taxes.
- Tenants may be able to take an income tax credit of up to $50 or a deduction equal to 18% of the rent they paid in a tax year.
- If you meet eligibility requirements, you may be able to take a state income tax deduction of up to $15,000 ($7,500 for married couples filing separately) or an income tax credit of up to $50 for property taxes, whichever is the greater benefit on your tax return.
- The Senior Freeze program provides eligible senior citizens with reimbursements that offset year-to-year increases in their property tax bills. If you’re eligible for the program, you could be reimbursed for any difference between your current year’s property taxes and the previous year’s taxes.
How has COVID-19 affected the NJ homestead rebate program?
Anticipating that the COVID-19 crisis would affect the state budget, the New Jersey Department of the Treasury announced in March 2020 that it would freeze $900 million in planned expenditures — including nearly $142 million tabbed for the homestead benefit program.
That means the state won’t be funding property tax credits that would have gone toward homeowners’ May 1, 2020, property tax bills. Some municipalities may have to issue revised property tax statements to account for the lost credit.
But New Jersey Gov. Philip D. Murphy also signed an executive order allowing municipalities to give homeowners more time to make certain property tax payments. Current state law only allows municipalities to provide grace periods of 10 days for property tax payments. In response to the coronavirus pandemic, Murphy’s order allows — but doesn’t require — municipalities to give taxpayers until June 1, 2020, to pay property taxes normally due on May 1.
Taxpayers should continue to monitor the websites of both the state’s Department of Treasury and Division of Taxation for updates and changes to property tax and homestead rebate information, the state says.
New Jersey Treasury: 2018 Homestead Benefit Program | State of New Jersey Department of Community Affairs Property Tax Information | NJ Treasury: How Homestead Benefits are Paid | NJ Treasury Homestead Benefit Program: Mailing Schedule | NJ Treasury Homestead Benefit Program: Eligibility Requirements | NJ Treasury: Homestead Benefit Program How Homestead Benefits are Calculated | NJ Treasury Homestead Benefit Program: How to File | NJ Treasury Homestead Benefit Program: FAQs | NJ Treasury Division of Taxation: Other Property Tax Benefits | New Jersey Resident Return NJ-1040 | New Jersey 2019 Form PTR-1 | IRS: Credits and Deductions for Individuals | New Jersey Department of Treasury News Release | New Jersey Gov. Phil Murphy News Release | New Jersey Treasury: 2017 Homestead Benefit Program
Rachel Weatherly is a tax product specialist with Credit Karma Tax®. She studied accounting and finance at Western Carolina University and has also worked as a tax analyst. You can find her on LinkedIn.