New Jersey Property Tax Relief Could Break Record
If Gov. Murphy’s budget is approved, some New Jersey residents may see their state property taxes cut in half.


Headache-inducing property tax bills are nothing new for New Jersey residents. With a median amount exceeding $9,300, the Garden State is one of the most expensive states for homeowners.
That said, there are a few promising New Jersey property tax relief programs that could help New Jerseyans.
For instance, the New Jersey ANCHOR program has provided millions in relief to eligible homeowners and renters. The state’s ‘Senior Freeze’ and newly created ‘Stay NJ’ programs are geared toward older residents, with the latter designed to “cut property tax bills in half,” according to the Governor’s office.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But a few sacrifices must be made to fund these relief programs — and the state’s millionaires could foot part of that bill. Gov. Phil Murphy’s 2026 proposal also leverages other tax increases, like higher tax rates on online gambling and even a new sales tax on drones.
Here’s more of what you need to know.
Update: This summer, Gov. Murphy signed a record-high 2026 state budget with millions in Stay NJ payouts and a new "mansion tax." For more information, check out Kiplinger's report What's Happening With the New Jersey State Budget?
‘Record high’ relief for property taxes in New Jersey
Murphy’s 2026 budget proposal promises the highest property tax assistance for New Jersey residents, with nearly $4.3 billion allocated to “Direct Property Tax Relief.”
Savings in New Jersey property taxes are allocated in the following ways:
- Over $2.4 billion is dedicated to New Jersey ANCHOR payments.
- More than $600 million to fund the Stay NJ program.
- About $239 million in funding to New Jersey’s ‘Senior Freeze’ program.
- About $1 million to support various state property tax deductions.
In total, this year’s proposal offers about $800 million more in property tax programs and deductions compared to last year’s budget. The increase may lead to added property tax payouts in 2026 to New Jersey residents.
But with the increased budget cost, something has to give. Part of that difference may be reconciled by higher-income New Jerseyans paying an increased “mansion tax” on their homes.
NJ mansion tax: Millionaires unwelcome?
New Jersey has a so-called “mansion tax” of 1%. In this case, a mansion tax is a fee that the buyer typically pays when real estate is purchased at $1 million or more.
Gov. Murphy’s 2026 budget proposal seeks to increase the New Jersey mansion tax rate to:
- 2% for properties sold between $1 million and $2 million.
- 3% for properties sold for more than $2 million.
These taxes are estimated to bring in $317 million in the year they are enacted.
So what’s the problem?
Well, the New Jersey real estate market is already tight. With some of the highest property taxes in the nation, $1 million doesn’t get you nearly as far as it does in other states with the lowest property taxes. Plus, the “1 million dollar rule” was enacted over 20 years ago. Without an inflation adjustment, more and more New Jerseyans may be subject to this tax — and the proposed increases — with each passing year.
New Jersey tax cuts and increases
Murphy’s 2026 budget proposal includes other items that affect New Jersey taxes.
- Eliminating the sales tax on sunscreen and baby products. This would make items like cribs, strollers, and car seats free of the state’s 6.625% sales tax.
- New sales taxes on previously state tax-free items. Digital services, drone purchases, and activities like bowling are a few items that would now be subject to tax. The “drone excise tax” is expected to bring in $5 million in state revenue.
- Higher tax rates on online gambling (15%) and sports wagers (13%). The tax proposal would increase both tax rates to 25%.
- Higher taxes on alcohol, vapes, and cigarettes. The alcohol tax would increase by 10%, the vape tax rate would increase by as much as 20%, and the cigarette tax would increase by 30%.
- Increased school funding. The 2026 budget proposal has a “record high” in K-12 funding, with over $12 billion allocated to schools and $1.3 billion dedicated to pre-K.
However, it’s important to note that the changes above are not guaranteed to be approved. Gov. Murphy’s budget proposal goes to state lawmakers next for consideration. Stay tuned.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.
-
Why is My First Medicare Bill So High?
Your first Medicare bill may be higher than expected for several reasons. If your premiums aren't taken out of your Social Security benefit, the bill can be huge.
-
11 Unforgettable Road Trips to Take in Retirement
More than a travel trend, the road trip is a quintessential American tradition, with millions of us taking them each year. Here's a guide to helping you choose your next adventure.
-
Is Trump's Tax Plan Speeding Up the Looming Social Security Funding Crisis?
Social Security Social Security's combined retirement funds are running out of cash, and its insolvency date is expected to occur in less than a decade.
-
Will You Get a ‘Surprise’ Tax Bill on Your Social Security Benefits in Retirement?
Retirement Taxes Social Security benefit payments might land you in hot water when filing 2025 taxes — here are three reasons why.
-
How the 2025 Child Tax Credit Rules Impact Single Parents
Tax Credits New changes to family tax credits, like the Child Tax Credit, will impact the eligibility of some households.
-
Retirees Should Watch These Four Key Tax Changes in 2025
Tax Changes This year brings key tax changes that could affect your retirement taxes and income.
-
Georgia Could Be Latest State to Eliminate Income Taxes
State Tax Eliminating the Georgia state income tax: Last-minute summer trend or permanent policy?
-
Biggest Winners and Losers in Trump's New Tax Plan
Tax Law Trump’s mega tax overhaul, known as the ‘One Big Beautiful Bill,’ has distinct winners and losers. Which group do you fall into?
-
No Capital Gains Tax on Home Sales Coming Soon? What You Need to Know
Tax Policy Capital gains taxes are back in the spotlight. This time, the chatter on Capitol Hill has to do with rising home prices.
-
Five Ways Trump’s 2025 Tax Bill Could Boost Your Tax Refund (or Shrink It)
Tax Refunds The tax code is changing again, and if you’re filing for 2025, Trump’s ‘big beautiful’ bill could mean a bigger refund, a smaller one or something in between next year. Here are five ways the new law could impact your bottom line.