New Jersey’s property taxes are expensive — no doubt about it.
New Jersey in 2023 had an effective tax rate of 1.77%, behind only Illinois, according to the nonpartisan Tax Foundation, a Washington-based think tank.
The Tax Foundation defines this rate as “the average amount of residential property taxes actually paid, expressed as a percentage of home value.”
Overall, the average property tax bill for homeowners in the Garden State was $10,095 in 2024, marking the first time this figure exceeded $10,000. That’s a nearly $300 — or 3% — increase from the average bill in 2023, according to data released earlier this year by the New Jersey Department of Community Affairs.
Property taxes have become central to the election strategies for both candidates for New Jersey governor: Republican former state assemblyman Jack Ciattarelli and U.S Rep. Mikie Sherrill, D-Montclair.
But why are property taxes so high? Why do more affluent towns have lower tax rates, while the opposite is true for less well-to-do communities and cities? Why can the average property tax bill for some towns so close to each other vary so widely?
Why are NJ’s property taxes so high?
Property taxes are typically used to fund local services, such as schools, police and fire, road construction, libraries, parks and water and sewage departments.
In many cases, each town replicates its own version of those services for its residents, like its own police department. Larger towns can achieve more economies of scale, buying more in bulk, from police cars to road salt, and therefore bargain for lower prices.
Many towns with higher property taxes lack other revenue sources, such as businesses or corporate headquarters, said Marc Pfeiffer, a senior policy fellow at Rutgers University’s Bloustein School of Planning and Public Policy, who studies local government in New Jersey.
So instead, municipal services — from the police department to the schools — are largely funded through property taxes alone, Pfeiffer said.
NorthJersey.com, October 24, 2025