Paying property taxes can be painful. Fortunately, as a resident of New Jersey, you may get some relief through tax breaks offered by the state to qualified homeowners or renters.
Make sure you’re making the most out of these tax incentives. Check out what’s available to you from this website. For a quick reference, we’re breaking down the details on three of the most widely used tax breaks.
Senior Freeze
This benefit is available to seniors 65 years and above or persons with disabilities. Basically, it freezes the property tax rate at a pre-determined base year, which is the year when you first qualified for the incentive.
In addition to the age or disability requirement, other eligibility requirements include:
- You must be a New Jersey resident in the past 10 years, either as a renter or homeowner
- You must have lived in the property you’re seeking exemption for in the last 3 years
- You have paid the full amount of the property tax for the year
- The property must be your primary home
- You must be earning no more than the amount set by the state each year, whether individually or together with your spouse. For 2018, the annual income limit is $89,013, but this may change from year to year
The Senior Freeze is a reimbursement rather than a deduction program. After paying the full tax amount for the year, you can get reimbursement for the difference between the tax you paid and the tax rate for your base year.
See this page to learn how to apply for the Senior Freeze Program.
Homestead Benefit Program
This tax benefit offers property tax rebates in the form of tax credits or $15,000, whichever is lower. It’s given to eligible New Jersey residents who have paid property taxes directly or through rents within a given year.
Presently, these rebates are received 2 to 3 years after the subject tax year. For example, rebates for property taxes paid in 2016 were given out in 2019. If you wish to apply for a rebate for 2017, the deadline for the filing of application is on December 2, 2019, and you may receive the rebates in 2020 or later.
The amount that may be credited can vary from year to year depending on the final state budget.
For information on eligibility and how to apply, go to this page.
Property Tax Deduction or Credit
You may deduct the property taxes that you paid directly or through rent from your taxable income, or receive a refundable credit for them. This can help reduce your income tax bill.
The amount that may be deducted or credited can vary from year to year. For 2017 and earlier, the maximum reduction was $10,000. For 2018, the allowed reduction is the lower of $15,000 or the full amount of the property tax you paid. For renters, the reduction limit is 18% of the rent you paid for the year.
The Pagnotta Homes can provide you with more useful information on property tax benefits in New Jersey. If you’re looking to buy or sell a home in Central New Jersey, they’re the Realtors to call. Get in touch with team at 908.436.7947 or email to info(at)pagnottahomes(dotted)com.