My Property Tax Bill Could Skyrocket Next Year. Here's How I'm Preparing

Rising home values could cause a lot of people to spend more money on property taxes in the near term. Here's how I'm gearing up for that.

When you live in New Jersey like I do, it's not uncommon to spend more money each month on property taxes than you do on an actual mortgage payment. New Jersey has the highest property taxes in the nation, and while there are plenty of people in the Garden State who pay a lot more than I do, my tax bill is a huge strain on our financial resources.

Unfortunately, next year, I expect things to get even worse. Home values have soared on a national level, and New Jersey real estate is no exception. In fact, right now, I could probably sell my home for $50,000 to $100,000 more than it would normally go for.

But I'm not trying to sell my home, at least not anytime soon. And so rather than benefit from that uptick in value, I stand to lose out in the form of a higher property tax bill.

Property taxes are calculated by taking the assessed value of a home and multiplying it by its local property tax rate. Home assessments can change from year to year based on market value. If my tax assessor deems my home to be worth more, my tax bill will go up. And while I can't say for sure how much of a property tax hike I'm looking at, I'm estimating it to be anywhere from $1,200 to $2,800.

If you're flinching right now, well, so am I. But I'm also taking steps to prepare for that tax hike via the following tactics.

1. Reworking my budget

Right now, housing is the largest monthly expense in my budget, and I expect it to eat up even more of my income next year. To compensate for this anticipated tax hike, I'll need to cut back in other spending categories.

Right now, my husband and I drive older cars and don't spend much on fancy clothing. And while we go out to dinner and order takeout on occasion, we don't spend excessively on those things.

As such, finding things to cut back on isn't going to be super easy, but one option is to look at spending less on vacations next year. Thankfully, we're a family who enjoys road trips, and those can be pulled off relatively cheaply. We also do our share of camping and have no problem slashing our travel costs by pitching a tent somewhere rather than springing for a hotel.

2. Taking on more work

As a freelance writer, the more work I do, the more I get paid. And while I already work a full-time schedule, I plan to push myself to do a little more work next year if my property taxes climb the way I expect them to.

While squeezing more assignments into my already jam-packed schedule won't be easy, I'm thankful that the option exists. And if I take on enough extra work to boost my income, I may not need to make many, or any, cuts to my household budget.

Prepare for a higher property tax bill

A general uptick in home values means that homeowners across the country are likely to see their property taxes go up next year. If you own a home and its value has increased, now's a good time to map out a plan so you're not caught off guard by that increase.

Granted, most people won't be looking at the same drastic increase I will. But if you're already living on a tight budget, even a $500 yearly increase could be a big deal.

If you follow a budget, take a look at your spending categories now and try to identify ways to cut back. And it also wouldn't hurt to research different side hustle options to earn some extra cash (unless you have the option to pick up overtime hours or extra shifts at your current job).

When home values rise, property taxes tend to follow suit. The more you prepare for a higher bill, the less stressed you'll be when it actually hits.