- New Jersey property taxes reached another record high last year, with the average bill rising to $10,570 in 2025, according to data from the state Department of Community Affairs. That was an increase of 4.7% over 2024, while inflation was 2.7%.
That’s just an average, though. Property owners pay wildly different amounts across the state and those property tax bills are likely to keep rising as local governments face increases in health insurance costs, salaries and other expenses. Another factor is how much aid to schools and local governments is contained in the budget for the fiscal year that starts July 1.
Local needs and decisions generally guide local spending, but the aid the state provides can mean the difference between a tax cut and an increase.
“Every dollar in what the state calls property tax relief is one less dollar that that needs to be collected from the local property taxpayers,” said Michael Cerra, executive director of the New Jersey State League of Municipalities.
Last year, the average homeowner in 63 municipalities paid less than $5,000. In 23 other towns, the average property tax bill exceeded $20,000. The absolute lowest and highest were in the state’s least populous communities. The average in Walpack, where the federal government owns most of the land, was $1,143, while in Tavistock — a municipality with a handful of houses, a golf course and a country club — it was $38,387.
Not every homeowner paid the same increase, either. In 20 municipalities, the average property tax dropped – by as much as 10% in Allenhurst. But in 34 towns, taxes rose by at least 10%, with the highest, almost 21%, in Millstone.
The 4.7% average increase last year was the largest of then-Gov. Phil Murphy’s eight-year tenure. From 2018-25, the average local property tax bill rose by less than 21%, even as the average assessed home value increased by almost 28%. Inflation rose by 31% during the same time, according to the Consumer Price Index.
Inflation, rising salary costs and double-digit increases in health insurance premiums likely contributed to the larger property tax increase last year, Cerra said. These and other expenses could boost taxes again this year without significant state support.
“So everybody’s dancing right now,” said Marc Pfeiffer, senior policy fellow and faculty researcher at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “Over the next three months, anything can happen.”
Municipal aid has been essentially unchanged for two decades, except for some emergency funding. Gov. Mikie Sherrill, who last week introduced a record $60.7 billion budget, has not proposed increasing general purpose aid to most towns. For towns in severe fiscal distress, though, she wants $95 million more, marking a 58% increase in so-called transitional aid.
Towns should be getting more money from energy tax receipts, which were originally paid directly to municipalities based on utilities’ use of public land, Cera said. The state though, diverts some for its own use. Lawmakers have started to explore a new aid formula but it likely would not be in place for the next budget.
Property tax bills include at least three components, paying for services at the municipal, county and school level. New Jersey does have a 2% cap on annual increases, but each level of government may raise taxes by 2%, Pfeiffer said. Also, health care, pension, debt service and emergency costs are exempt from that limit.
The largest portion of property taxes funds local and regional schools. The state has continued to increase school aid: Sherrill is recommending a 3.1% hike, or $320 million, for a record $12.4 billion. According to the school aid formula, though, some districts get more money while others lose.
Average property tax bills show the ramifications of these decisions in many cases.
Atlantic City’s dropped by almost 7% since 2018, averaging $4,224 last year. At the same time, state aid to the city’s school district ballooned to about $131 million, about 5 ½ times more than in the 2017-18 school year. The percentage of the total tax bill that pays for education dropped to 40% from 42.2% during the same time, while the state average was 52.2%.
Asbury Park, on the other hand, has lost more than two-thirds of the $54 million in school aid it got in 2017-18, dropping to $17.5 million in the current school year. The percent of property taxes that fund schools jumped to 56% from about 25%. At the same time, the average tax bill more than doubled to $11,176 last year.
Decreased state aid is one reason why school taxes rose, though there are many others, according to Jonathan Pushman, senior director of advocacy for the New Jersey School Boards Association.
“The costs associated with running a school district have far outpaced the rate of general inflation in several areas, such as health care, transportation and special education,” he said. “School security costs and mental health needs are also affecting district finances.”
A lack of adequate aid can lead to school closures, staff layoffs and program and service cuts, Pushman said. The best way to preserve these and keep property tax increases at bay is to give schools the aid they need.
“The state must remain committed to adequately funding our schools without shifting any additional burdens onto local school districts and taxpayers,” he said. “Raising property taxes, while equally undesirable, may be necessary as well if we are going to continue providing our children with the quality education every one of them deserves.”
Sherrill’s budget proposes a cut to Stay NJ, reducing income eligibility by half to $250,000 and decreasing the maximum benefit to $4,000 from $6,500. That would save the state about $500 million. It’s unclear whether lawmakers will agree to cut the program that was designed to keep senior citizens from moving to lower-cost states.
New Jersey has had among the highest property taxes in the nation for years, due in part to heavy reliance on 564 municipalities to fund schools and local services. While residents also pay state income taxes and sales taxes, it’s the property tax that people hate the most.
“There is widespread agreement in New Jersey that the taxes are too damn high, and that’s entirely in reference to property taxes,” said Dan Cassino, a Fairleigh Dickinson University professor of government and politics and executive director of the FDU Poll. “Property taxes are more visible, and there are constant reminders of them. If you have a mortgage, you get a notification that you need to put more into your escrow account; if you own your home, you’re writing a check every quarter.”
This story is made possible in part by the Corporation for Public Broadcasting, a private corporation funded by the American people.
