TRENTON – A bill sponsored by Senator Ronald L. Rice which would limit the increase in property taxes payable on any new building or structure to five percent above the most recent tax assessment on the replaced building or structure was approved by the Senate Community and Urban Affairs Committee yesterday by a vote of 3-0, with 2 abstentions.
“At a time when the housing market is in a slump and people are out of work, we need to remove any obstacles which block redevelopment in communities in need,” said Senator Rice, D-Essex, and Chairman of the Senate Community and Urban Affairs Committee. “With New Jersey’s highest-in-the-nation property taxes, one of the biggest obstacles to reclaiming run-down buildings in our impoverished cities is the unfair hike on property taxes when a building is improved. Rather than base property tax calculations on outdated and unfair tax models, we need to provide a shield from unjust tax increases when a community is trying to rebuild itself.”
The bill, S-74, would establish a cap of five percent above the most recent tax assessment on a replaced building or structure for any new, renovated or redeveloped buildings in New Jersey. Under the bill, the five percent increase limitation would remain in effect until the new building or structure has its true and fair value assessed as part of a municipal-wide revaluation. Senator Rice noted that the bill is intended to promote redevelopment in older urban communities and maintain a habitable housing stock by encouraging the renovation of property without triggering a disproportionate increase in property taxes on the renovated property when other properties in the neighborhood are assessed below market value.
“New Jersey has an overwhelming interest in promoting redevelopment in lower-income neighborhoods, to create affordable housing where there is none, and put unemployed New Jerseyans to work,” said Senator Rice. “Especially when market values are down, developers and redevelopers back off from the sort of projects that New Jersey needs, because property taxes are simply too high, and further over-inflated based on home values in market boom years. This bill keeps property taxes in check until revaluation can occur, and will hopefully encourage new jobs and housing opportunities to be created in cities where they will do the most good.”
The bill now heads to the Senate Budget and Appropriations Committee for review before going to the full Senate for consideration.