New Jersey caps property tax at 2 percent
New Jersey has passed a 2 percent cap on property taxes, called “Cap 2.0,” in an effort to bring financial relief to residents who have faced the highest property taxes in the country. However, the new law also gives residents the right to vote to increase their own taxes, if they wish.
The new 2 percent cap replaces a previous 4 percent cap. With Cap 2.0, the property tax levy cannot increase in any year more than 2 percent, with very limited exceptions, such as if residents of a particular community vote to allow an increase above the cap, according to Gov. Chris Christie’s office. “New Jersey families can finally look forward to the kind of real, long-term property tax relief that Trenton has failed to deliver for decades,” Christie said in a statement. “A hard cap of 2 percent with limited exceptions that puts final authority to exceed the cap in the hands of the people is the substantial and sustainable reform New Jersey needs.”
The new cap also is intended to eliminate the 14 exceptions or waivers, including a catch-all that allows for exceptions not covered in the first 13, which has made the current 4 percent cap almost irrelevant, Christie’s office says. Any waivers of the Cap 2.0 hard cap will be granted by a vote of the people, and a local cap override referendum would be approved by a simple majority vote.
New Jersey property taxes have grown by 70 percent in the last decade, and local government spending has grown by 69 percent, from $26.5 billion in 2001 to approximately $44.7 billion this year. Had a hard cap been in place for the last decade, the governor’s office says, the average family’s property tax bill today would be $5,167, rather than the current $7,281. “Over the years, as property taxes have continued to go up, it has become apparent that Trenton politicians of both political parties have repeatedly failed to fix the system,” Christie said. “Today, we are acting together to ensure that in the years ahead young families won’t be struggling to own a home because they can’t afford the property taxes and that our seniors aren’t forced to move out of state by wild tax increases year after year.”