Home improvement exemption
Under the Five-Year Exemption and Abatement Law, a town's ordinance can treat the first $5,000, $15,000 or $25,000 of value from improving a home more than 20 years old as not raising its value for five years, in areas declared in need of rehabilitation.
New Jersey example
Made-up numbers: your town's ordinance picks $25,000, and the assessor values the new kitchen and bath on your 70-year-old house at $40,000. For five years, the first $25,000 is treated as adding no value, so only $15,000 can be added. You must apply with the assessor within 30 days of finishing the work, counting Saturdays and Sundays.
Official source
This is a plain-English summary. Rules and dollar amounts change, so check the official source or a professional before you file or sign anything.