Nearly 1.8 Million New Jersey Residents Could Be in Line for Housing Relief

Here's some good news for the Garden State.

Many Americans are struggling to keep up with their housing costs in the wake of the pandemic. Homeowners and renters in New Jersey are no exception.

Not only is New Jersey a costly place to live, but it happens to have the highest property taxes in the nation. But soon, residents of the Garden State could see some relief.

Relief for almost 1.8 million households

As part of the state's 2023 fiscal year budget, New Jersey Governor Phil Murphy has proposed a new property tax relief program. Homeowners earning up to $250,000 a year may be eligible for property tax rebates averaging $700 under the program, which would effectively cut property tax rates down to 2016 levels for households who qualify.

But it's not just homeowners in the state who stand to benefit from the program. Renters earning up to $100,000 could also qualify for relief, albeit at a lower threshold -- up to $250, as opposed to $700. The goal there would be to help offset higher housing costs.

To be clear, property taxes aren't set at the state level in New Jersey, or even the county level. Rather, individual towns are able to establish their own tax rates. But this year, many homeowners are looking at higher property tax bills as a result of rising home values. And that's a burden that will no doubt cause many residents to have to dip into their savings.

Compounding the issue is that like all taxpayers, New Jersey residents are limited to a $10,000 state and local tax (SALT) deduction when filing federal tax returns. Given that many New Jersey homeowners have property tax bills that well exceed the $10,000 mark, the SALT cap, which was implemented as part of the massive 2017 Tax Cuts and Jobs Act, was a big blow to much of the state. Getting some amount of rebate could help soften it.

Aid could increase over time

If New Jersey's tax relief program is approved by state lawmakers, it could distribute a good $900 million in property tax relief for the 2023 fiscal year. But actually, the program's goal is to provide relief over a three-year period and boost that relief incrementally so that come 2025, homeowners who are eligible could be in line for an average rebate of $1,150.

To be clear, though, many New Jersey residents will not be eligible for relief due to the income limitations. While earnings of over $250,000 are considered high in much of the country, they're often necessary to afford a home in New Jersey. While this new program could benefit a large number of people, it will also inevitably leave a lot of residents who aren't necessarily rolling in money out in the cold.

Meanwhile, New Jersey residents who are currently facing a sky-high property tax bill for 2022 can explore their options for appealing it. But given the way home values have soared, they may not be successful.