New Jersey has long been known for its picturesque suburbs, proximity to major cities like New York and Philadelphia, and strong community ties.
But when it comes to taxes, the Garden State has earned a reputation that might give homeowners pause.
The Nation’s Highest Property Taxes
If you own a home in New Jersey, you’re likely familiar with the state’s staggering property tax bills. In fact, New Jersey consistently ranks as the state with the highest property taxes in the United States.
According to recent data, the average homeowner in New Jersey pays around $10,000 annually in property taxes—significantly higher than the national average. This high tax burden is driven by the state’s reliance on property taxes to fund local schools, municipal services, and infrastructure.
While Proposition 2, which caps property tax increases, has provided some relief, many residents still find the bills difficult to manage—especially as housing prices climb.
A Steep Income Tax Rate Adds to the Burden
It’s not just property taxes that make New Jersey costly for residents. The state’s top income tax rate of 10.75% is among the highest in the nation. This progressive tax rate kicks in for those earning above $5 million annually but impacts a wide range of middle- and upper-income earners at various levels.
High earners in particular feel the squeeze, with some noting that combined state and local taxes can significantly reduce take-home pay.
Why New Jersey Residents Stay Despite the Costs
So, why do people stay in New Jersey despite these high taxes? For many, it’s about more than just dollars and cents:
- Location: New Jersey’s proximity to New York City and Philadelphia offers unparalleled job opportunities and cultural experiences.
- Quality of Life: Strong public schools, parks, and safe neighborhoods make it an attractive place for families.
- Community: Many residents have deep roots in their towns, making the decision to leave difficult despite tax pressures.
The Growing Discussion Around Tax Relief
With rising taxes making headlines, there’s increasing public pressure on state and local governments to find solutions. Ideas like expanding property tax rebates, reassessing municipal spending, and reforming the income tax brackets are all being debated.
However, any changes must balance the need for public services with residents’ ability to pay—a challenging task for policymakers.
New Jersey’s tax landscape is tough—topping the nation in property taxes and ranking high in income tax rates. For homeowners and high earners, it’s a reality that affects budgets and lifestyles alike.
Yet, many New Jerseyans believe the benefits of living in the Garden State still outweigh the costs. Whether that continues to be true in the years ahead remains to be seen as tax debates intensify.
Carol McDaniel is a dedicated and results-driven professional with 5 years of experience and US News. Known for her strong problem-solving skills and collaborative mindset, Carol has built a reputation for delivering high-impact results across diverse teams and projects.
Throughout her career, she has demonstrated expertise in 2 core skills or areas, e.g., client relations and project coordination, and is passionate about continuous learning and meaningful contribution. Carol thrives in dynamic environments and consistently brings professionalism, adaptability, and a focus on growth to every role she takes on.