New Jersey Reaches Deal to Drastically Reduce Property Taxes for Older Homeowners

New Jersey Reaches Deal to Drastically Reduce Property Taxes for Older Homeowners

Edited by: TJVNews.com

New Jersey has long been known for having some of the highest property taxes in the country, which has led many older residents to sell their homes when downsizing or moving out of state, as was reported by the NY Times. However, a new development offers hope for relief as Democratic legislative leaders, along with the governor, have announced a final deal on a comprehensive plan to significantly reduce property taxes for homeowners aged 65 and older. The NYT reported that this sweeping initiative, called StayNJ, aims to cut property tax bills in half for most older homeowners, with a maximum benefit of $6,500. Although the plan still requires approval as part of a proposed $53 billion budget, its passage in the Democrat-led Legislature is considered likely, as was noted in the report.

Under the StayNJ program, which is expected to begin in January 2026, any homeowner aged 65 or older with an annual income of $500,000 or less would be eligible for the tax cut, as was indicated in the NYT article. The program’s proponents see it as a transformative opportunity to make New Jersey the best place for seniors to retire, allowing them to remain with their families in the towns they helped build. The report observed that if enacted, this reduction would represent one of the largest tax cuts in the state’s history.

The deal faced stumbling blocks during negotiations due to its estimated annual cost of around $1.3 billion and the absence of a permanent funding source, as was reported in the NYT article. There were concerns that implementing the program without a sustainable financial plan could jeopardize New Jersey’s newly improved credit rating. However, the NYT noted that after all-night negotiations, leaders met to fine-tune the bill language and address these concerns. The revised plan includes an additional $250 annual rebate for most renters and incorporates nonbinding language to safeguard the state’s budget surplus, pension obligations, and funding for public schools even during an economic downturn, the report said.

New Jersey homeowners currently pay the highest property taxes in the country. The average property tax bill in the state was $9,490 last year, with affluent communities paying significantly more. The NYT reported that while some homeowners qualify for rebates through programs like ANCHOR, which is available to families with incomes below $250,000, StayNJ aims to benefit nearly all older residents except the wealthiest. Approximately 85% of recipients are expected to have incomes below $200,000. The NYT indicated that the plan seeks to alleviate the burden on older homeowners who often face difficulties in balancing the costs of food, medicine, and other essentials.

To kickstart the tax cut, state leaders plan to allocate $600 million over the next three years, potentially using unspent federal Covid-19 stimulus funds. However, the NYT reported that the commitment to maintaining the tax cut beyond Governor Murphy’s second term, which ends in 2026, would require future legislatures to continue funding it. The proposed reduction in property taxes aligns with Governor Murphy’s support for StayNJ, as he moves closer to the center after his initial term as an unabashed progressive.

While StayNJ has gained significant support, there are opposing viewpoints as well. Left-leaning groups, who were in favor of maintaining a 2.5 percent business surcharge for high-earning companies, have now voiced opposition to StayNJ, according to the NYT report. They argue that the tax cut would exacerbate the racial wealth gap in the state. Critics question the need to provide assistance to older high earners, suggesting that those with incomes of $400,000 or more should be able to pay their property taxes without government assistance.

New Jersey’s ambitious plan to drastically reduce property taxes for older homeowners represents a significant step towards alleviating the burden on residents who are already hit with inflationary prices on basic essentials. The StayNJ program aims to make the state more attractive for retirees, allowing them to remain in their communities with their loved ones. While the deal faces some financial challenges and differing perspectives, the NYT reported that it is expected to bring substantial relief to most older homeowners. The outcome of this initiative will shape the future of property taxation in New Jersey and potentially serve as a model for other states grappling with similar challenges.