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New Jersey property glossary

Simple definitions for the words on your tax bill, your relief application, your closing papers and your lease. Every term links to the official New Jersey source it comes from.

121 terms

Your tax bill

What's on the bill, when it's due, and what happens if it's late.

2% property tax levy capA state limit that keeps a town, county or fire district from raising its total property tax levy more than 2% a year, with exclusions for things like debt service, capital spending, some pension and health cost increases, and declared emergencies. County taxThe part of your property tax that pays for county government. The county's tax need is split among its towns based on each town's equalized value, which is the state's measure of the total market value of the town's property. Delinquent tax interestInterest your town charges on late property taxes. State law caps it at 8% a year on the first $1,500 overdue and 18% a year above that. A town may also add a year-end penalty of up to 6% if over $10,000 is still unpaid. Estimated tax billA bill a town may send, by resolution, when the county tax board hasn't certified all the tax rates by the mailing date. It uses an estimated levy, and a later reconciled bill corrects the amount once final rates are set. Fire district taxA tax on property inside a fire district, a separate local unit run by elected fire commissioners to provide fire protection. Your town assesses and collects it with your other property taxes, then pays it over to the district. General tax rateThe rate your town uses to figure each property's tax bill, stated per $100 of assessed value. Multiply your assessment by the rate to get your yearly tax. It is not the same as the effective tax rate. Municipal tax levyThe total dollars a town plans to raise from property taxes for its own budget. It is what is left after the town subtracts the other revenue it expects from what its budget needs. Open space taxAn extra property tax that voters approve to buy and care for parks and open land, preserve farmland and protect historic sites. Counties and towns can each have one, and the money must go into a dedicated trust fund. Preliminary tax billThe bill for the first two quarters of the year, due February 1 and May 1. The new tax rate isn't set yet, so each of those payments is normally one-quarter of your total tax for the year before. Property tax billThe bill for the yearly tax on your home or land. Your town collects it, but the money is split among your county, your school district and your town, plus any special district such as a fire district. Quarterly tax installmentsNew Jersey property taxes are paid in four installments each year, due February 1, May 1, August 1 and November 1. The dates are set by state law, so they are the same in every town. School taxThe part of your property tax that pays for public schools. Most school districts match one town, but some towns belong to a regional district whose costs are split among member towns by property value, enrollment or a mix. Special improvement district (SID)A defined business area, usually a downtown, where the town charges a special assessment on commercial properties or businesses. The money goes to a nonprofit management group that runs district programs, and the town approves its budget yearly. Tax collectorThe town official who figures out how much tax each owner owes, sends the bills, takes in payments and enforces late taxes through interest, tax liens and tax sales. Tax grace periodThe short window after a due date when you can pay without interest. A town may choose to offer one, but state law caps the normal grace period at 10 calendar days. Longer interest-free periods are allowed only in special cases. Tax rate vs. effective tax rateThe municipal tax rate is applied to assessed value; an effective tax rate expresses tax relative to estimated true market value, making cross-town comparisons more meaningful. Tax saleAn auction a town holds at least once a year when property taxes or town charges go unpaid. The buyer pays what is owed and gets a tax sale certificate, which is a lien. The property itself is not sold. Tax sale certificateThe lien a buyer gets at a tax sale for paying a property's overdue taxes. The owner can clear it by redeeming, which means paying the amount plus interest and a 2%, 4% or 6% penalty. If it isn't redeemed, the holder can seek foreclosure.

Assessments and appeals

How your home gets its assessed value and how to challenge it.

Added assessmentAn additional assessment imposed when taxable new construction or an improvement is completed after the regular assessment date. Assessment date (October 1)The date New Jersey uses to value property for taxes: October 1 of the year before the tax year. Your assessment is meant to reflect what your property would sell for on that date. Block and lotThe pair of numbers that identifies a parcel on a town's tax map. Each block bounded by public roads gets a block number, and each parcel inside the block gets a lot number. Chapter 123New Jersey's statutory assessment-ratio framework used by county tax boards to compare an assessment with true value and the municipality's common level range. Coefficient of deviationA state measure of assessment uniformity showing how tightly individual assessment-to-sale ratios cluster around the municipality's average. Common level rangeThe Chapter 123 corridor around a municipality's certified ratio, generally 15% above and below the average ratio. Comparable sales (comps)Sales of properties similar to yours that you use as evidence of your property's market value in an appeal. Sale prices count as evidence; other properties' assessments do not. Condo qualifierA code added after the block and lot to tell apart units that share the same parcel. For a condo unit it is the letter C followed by the unit number, such as C0001. County board of taxationA board in each of New Jersey's 21 counties that supervises local assessors and hears property tax appeals. For most owners, it is the first place to file if you want to challenge your assessment. Director's Ratio / equalization ratioThe state-certified average ratio of assessed value to true value for a municipality. Equalized valueAssessed value divided by the town's average ratio of assessed value to true value. It turns an assessment into an estimate of full market value, even in towns that assess below 100%. Exempt propertyProperty that pays no property tax because of who owns it and how it is used, such as public schools, government property, church and charitable property, and cemeteries. Assessors code it as Class 15. Farmland assessmentA preferential assessment program for qualifying actively devoted agricultural or horticultural land, subject to statutory requirements and possible rollback taxes after disqualifying changes in use. Freeze ActA New Jersey law that keeps an assessment set by a final appeal judgment in place for that tax year and the next two. It stops a town from forcing an owner to appeal again every year. Improvement ratioThe share of a parcel's total assessment allocated to improvements rather than land. MOD-IVNew Jersey's standardized local property-tax assessment data format used to transmit municipal assessment-roll information. Net valuation taxableThe total assessed value of all taxable property in a town, after partial exemptions and abatements are subtracted. It is the base that the town's general tax rate is applied to. Notice of assessmentA yearly notice, often a postcard, that your assessor mails to show your property's current assessment and the previous year's taxes. It must also tell you how to appeal. Omitted assessmentAn assessment used when taxable property or an improvement should have been assessed but was omitted from the regular roll. Presumption of correctnessThe legal starting point in an appeal: your assessment is treated as correct until proven wrong. The person appealing, usually the owner, carries the burden of proof. Property classA code the assessor gives every parcel based on its use, such as 1 for vacant land, 2 for residential, 3A or 3B for farms, 4A for commercial, 4B for industrial, 4C for apartments, and 15A to 15F for exempt property. Property tax appealA request to your county board of taxation to change your property's assessed value. You can appeal the assessment, but not the tax bill itself, because the taxes come from local budgets. Revaluation vs. reassessmentBoth update assessments toward current value, but New Jersey uses distinct administrative processes and terminology for municipal-wide assessment maintenance. Tax appeal deadlineYour appeal must reach the county tax board by April 1 or 45 days after your town finishes mailing assessment notices, whichever is later. In a town that put a townwide revaluation or reassessment into effect that year, the deadline is May 1. Tax assessorThe local official who sets the assessed value of every property in town for tax purposes. The town appoints the assessor, but the duties are set by state law, and the assessor must hold a state Tax Assessor Certificate. Tax Court of New JerseyThe state court for tax cases. For property taxes, it reviews county tax board decisions, and owners of property assessed above $1,000,000 can file there directly instead of going to the county board first. True value vs. assessed valueTrue value is market-value concept; assessed value is the taxable value carried on the municipal assessment roll.

Tax relief programs

State and local programs that cut or pay back part of your property tax.

$250 senior citizen or disabled person deductionA $250 yearly cut in the property tax bill for a homeowner who is 65 or older or permanently and totally disabled, or an unmarried surviving spouse 55 or older. Income can be no more than $10,000, not counting Social Security or certain pensions. $250 veteran deductionA $250 yearly cut in the property tax bill for an honorably discharged veteran with active duty service who owns the property and is a New Jersey resident on October 1 of the year before the tax year. Some surviving spouses and partners also qualify. 100% disabled veteran exemptionA full property tax exemption on the main home of an honorably discharged veteran certified by the U.S. Department of Veterans Affairs as 100% permanently and totally disabled from active duty service. Unremarried surviving spouses or partners may qualify. Abatement vs. exemptionAn exemption removes qualifying value from taxation while an abatement generally reduces or phases the taxable obligation under a specific legal program. ANCHOR programANCHOR is New Jersey's yearly property tax relief payment for people who own or rent their main home. For the 2025 benefit, homeowners qualify with income up to $250,000 and renters with income up to $150,000. Five-Year Exemption and AbatementA state law that lets a town, by ordinance, give a five-year property tax exemption, abatement or both for new construction, improvements or conversions in areas it has declared in need of rehabilitation. Without a town ordinance, it is not available. Home improvement exemptionUnder 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. Homestead BenefitThe Homestead Benefit was New Jersey's earlier state property tax relief program. ANCHOR replaced it starting with the 2019 tax year, and ANCHOR covers both homeowners and renters. NJ income tax property tax deduction and creditOn the New Jersey income tax return, a homeowner or renter can deduct property taxes paid on the main home, up to $15,000, or take a $50 refundable credit instead. You can claim only one, so pick whichever helps more. PAS-1 applicationForm PAS-1 is one combined application that New Jersey homeowners and renters who are 65 or older, or getting Social Security or Railroad Retirement disability benefits, use to claim Senior Freeze, ANCHOR and Stay NJ. Senior Freeze (Property Tax Reimbursement)Senior Freeze, officially called Property Tax Reimbursement, pays eligible homeowners back for property tax increases above their base year. It is for people 65 or older or getting Social Security or Railroad Retirement disability benefits. Senior Freeze base yearThe tax year used as the comparison point for an eligible Senior Freeze applicant's future property-tax reimbursement calculation. Stay NJStay NJ is a property tax benefit for homeowners 65 or older. You claim it on the same PAS-1 form as ANCHOR and Senior Freeze, and the amount depends on your tax bill and those other benefits. Renters and mobile home owners cannot get it.

Town and school budgets

Where the money on your bill goes and the rules towns and schools follow.

Affordable housing obligation (Mount Laurel)Under the Mount Laurel court rulings and state law, a town must use its zoning to give a realistic chance for its fair share of the region's need for low- and moderate-income homes. Towns must plan for it but are not required to build it. Appropriations cap (1977 cap law)A 1977 state law that limits how much a town can raise its budget spending, called final appropriations, from one year to the next. It is separate from the 2010 property tax levy cap, and towns must follow both. Area in need of redevelopmentAn area a town has formally declared "in need of redevelopment" under the Local Redevelopment and Housing Law, based on conditions such as unsafe or abandoned buildings. The label gives the town special redevelopment powers. County equalization tableA yearly county table that converts each town's total assessed value into true value, using its average assessment ratio. It lets the county split county taxes fairly among towns that assess at different levels. Debt serviceThe payments a town makes on money it has borrowed through bonds and notes, covering both principal and interest. Each year's budget must include a separate line for it. Municipal audit and Annual Financial Statement (AFS)Two yearly checkups on a town's finances: the Annual Financial Statement (AFS) the town files with the state, and the annual audit done by an auditor. Municipal budgetA town's yearly spending plan. The governing body, such as the town council, must first introduce and approve it and then formally adopt it, by deadlines set in state law. Municipal surplus (fund balance)What a town has left when its cash and other quick assets are greater than its liabilities. A town can use some of it as revenue in next year's budget, which lowers the amount it must raise from property taxes. PILOT agreementA payment-in-lieu-of-taxes arrangement in which an approved project makes negotiated payments under an applicable redevelopment or tax-exemption program instead of ordinary property taxes. Ratables (ratable base)The taxable property in a town, measured by its total assessed value. The amount a town must raise in property taxes is spread across this base, so a bigger base can mean a lower tax rate. School bond referendumA ballot question asking voters in a Type II school district to approve school bonds for a building project. In Type I districts and Type II districts with a board of school estimate, that board approves the borrowing instead of voters. School budgetA school district's yearly spending plan. The board of education adopts it and sends it to the state Education Commissioner for approval, and the school tax amount it sets is collected through local property tax bills. State school aidMoney the state gives school districts under the School Funding Reform Act (SFRA). Its biggest piece, equalization aid, gives more to districts with higher student needs and fewer local resources, measured by income and property values. User-Friendly Budget (UFB)A summary section that every New Jersey town must prepare with its budget. It is shown to the public as part of the introduced budget and filed with the state Division of Local Government Services.

Buying and selling

Fees, forms and inspections that come up when a New Jersey home changes hands.

AppraisalAn independent expert's opinion of a home's fair market value, meaning the price a willing buyer and seller would agree to. It is separate from your tax assessment, the assessor's value as of October 1 that your property tax is based on. Arm's-length saleA sale on the open market between a willing buyer and a willing seller, with no force or pressure on either side. New Jersey assessors use SR-1A sale reports to judge whether a sale meets this test. Attorney review periodWhen a real estate agent or broker prepares a New Jersey home sale contract, it must include an attorney review clause. The buyer and seller then have three business days from delivery of the fully signed contract to have a lawyer review it. Certificate of continued occupancy (CCO)A certificate for an existing building, issued at the owner's request after a general inspection of its visible parts finds no code violations or unsafe conditions. Some towns inspect homes for resale, and local fees for these certificates vary by town. Certificate of occupancy (CO)The local construction official's approval to use a new building, an addition, or a building whose use is changing. Under New Jersey's Uniform Construction Code, these cannot be used until the CO is issued. Closing costsOne-time fees paid at closing, separate from the price itself, such as loan application, credit report, appraisal, inspection, title insurance and survey fees. New Jersey's banking department tells buyers to expect about 3 to 4 percent of the sale price. DeedThe signed legal document that transfers ownership of real estate. In New Jersey, deeds are recorded by the county recording officer (the county clerk or, in some counties, the register of deeds and mortgages) in the county where the property sits. Earnest money depositMoney a buyer puts down with an offer to show they are serious about buying. An escrow agent named in the contract holds it, and at closing it is usually applied toward the down payment. Flood risk disclosureSince March 20, 2024, New Jersey sellers must answer flood risk questions on the seller's property condition disclosure statement before a buyer signs a sales contract, including FEMA flood zone status and known flood history. GIT/REP formsNew Jersey income tax forms that must be filed to record the deed when property is sold. Residents file GIT/REP-3. Nonresident sellers generally prepay estimated tax at closing: 10.75% of the gain or 2% of the price, whichever is more. Home inspectionA paid check of a house's condition, often hired by a buyer before closing, that ends in a written report. New Jersey licenses home inspectors under the Home Inspection Professional Licensing Act, passed in 1997. Mansion tax (Graduated Percent Fee)New Jersey's extra fee on certain sales over $1 million, now called the Graduated Percent Fee. For deeds submitted for recording on or after July 10, 2025, the seller pays it, at 1% to 3.5% of the full price. Before that, buyers paid a flat 1%. RadonAn invisible, odorless radioactive gas from uranium in soil and rock that can build up in homes and raise lung cancer risk. NJDEP recommends testing all homes and fixing levels of 4 pCi/L or more. Realty transfer fee (RTF)A New Jersey state fee the seller pays when the deed for a sale is recorded. It is based on the sale price, with lower rates for qualifying senior citizens, blind or disabled sellers, and low and moderate income housing. Residential heating oil tank (UHOT)A home heating oil tank that is 10 percent or more underground is an "unregulated heating oil tank system" under NJDEP rules. If one leaks, the owner must report it to DEP right away and clean it up under state rules. Smoke alarm, CO alarm and fire extinguisher certificate (CSACMAPFEC)A certificate the owner must get from the local enforcing agency before a one- or two-family home is sold or leased. It shows the home has the required smoke alarms, carbon monoxide alarms where needed, and a portable fire extinguisher. SR-1ANew Jersey's property-transfer and sales-ratio record used by the Division of Taxation in equalization and assessment analysis. Title insuranceInsurance that protects the buyer and the lender, up to the purchase price, if the title to the property turns out to be invalid. It is a one-time fee paid at closing, and lenders require it in nearly all financed purchases.

Mortgages and insurance

Loan and insurance terms every buyer and owner runs into.

Adjustable-rate mortgage (ARM)An adjustable-rate mortgage (ARM) has an interest rate that changes at a set future date, usually after one, three or five years. The starting rate is usually lower than a fixed rate, but you take the risk it goes up. Annual percentage rate (APR)The annual percentage rate (APR) is the overall yearly cost of a loan, counting the interest rate plus the loan's other costs. Comparing it with the quoted interest rate shows how much the fees add. Debt-to-income ratio (DTI)Your debt-to-income ratio (DTI) is your monthly debt payments divided by your monthly income before taxes. Lenders use it to decide how large a mortgage you qualify for. Fixed-rate mortgageA fixed-rate mortgage has an interest rate that stays the same for the entire life of the loan, so the principal and interest part of your payment does not change. Flood insuranceFlood insurance is a separate policy that pays for flood damage, which standard homeowners policies do not cover. You can buy it through the National Flood Insurance Program or from a private insurer. ForeclosureForeclosure is the legal process a lender uses to sell a home when the borrower falls behind on the mortgage. New Jersey is a judicial foreclosure state, so every case goes through the court. Home equityHome equity is the share of your home's value that you own outright: the home's fair market value minus what you still owe on the mortgage. Home equity line of credit (HELOC)A home equity line of credit (HELOC) is a loan, usually a second mortgage, that lets you borrow against your home equity as you need it, up to a limit based on a percentage of that equity. Homeowners insuranceHomeowners insurance pays for covered damage to your house and belongings, like from a fire, and protects you if someone sues over an injury or damage tied to you or your home. Your mortgage lender won't let you close without it. Loan-to-value ratio (LTV)Loan-to-value ratio (LTV) compares your mortgage balance with the home's appraised value, or the sale price if that is lower, shown as a percentage. Mortgage escrow accountA mortgage escrow account is an account your lender sets up to collect extra money with each monthly payment, then uses it to pay bills like your property taxes and insurance when they come due. Mortgage points (discount points)Mortgage points are a one-time fee you pay the lender, either to cover the cost of making the loan or to lower your interest rate. One point equals 1 percent of the loan amount. Mortgage pre-approvalMortgage pre-approval is when a lender reviews your official loan application, finances and credit, then tells you the specific amount you are approved to borrow and the interest rate. It goes further than pre-qualification. Private mortgage insurance (PMI)Private mortgage insurance (PMI) protects the lender, not you, if you stop paying your mortgage. Lenders generally require it when your down payment is less than 20 percent of the price. Special Flood Hazard Area (SFHA)The Special Flood Hazard Area is the area FEMA's flood insurance rate maps show as the 100-year floodplain, meaning land with a 1% chance of flooding in any given year.

Renting

Your rights and your landlord's duties under New Jersey law.

Anti-Eviction ActA New Jersey law that lets most landlords evict a tenant, or refuse to renew a lease, only for a "good cause" listed in the law, such as unpaid rent or damaging the property. A lease simply ending is not a good cause. EvictionThe court process a New Jersey landlord must use to remove a tenant. The landlord sues in the Special Civil Part, must win a judgment for possession, then gets a warrant of removal, and only a court officer can carry it out. Fair Chance in Housing ActA 2021 New Jersey law that stops most landlords from asking about your criminal record until after they make you a conditional offer, and limits which records they can consider. Owner-occupied buildings with four or fewer units are exempt. Housing Choice Voucher (Section 8)A federally funded rent subsidy, often called Section 8, that helps low- and very low-income households rent private homes. In New Jersey, DCA and local housing agencies run it and pay part of the rent directly to the landlord. Housing discriminationTreating a renter unfairly because of who they are. New Jersey's Law Against Discrimination bars landlords from doing this based on traits like race, creed, national origin, sex, gender identity, disability, familial status, or source of lawful income. Landlord registration statementA form New Jersey landlords file that lists the owner, managing agent, an emergency contact, and mortgage holders. Non-owner-occupied one- and two-unit rentals file with the town clerk; buildings with three or more units file with DCA. Lead-safe certificationA certificate showing a pre-1978 rental home passed a lead-based paint hazard inspection under New Jersey's 2021 rental lead law. Inspections are due every three years or at tenant turnover, and a certificate is valid for two years. Notice to quitA written notice from a landlord that ends the tenancy and tells the tenant to leave. In New Jersey it does not force you out on its own; a court must enter a judgment for possession before you have to move. Rent controlLocal limits on how much a landlord can raise the rent. New Jersey has no statewide rent control law, so it only exists in towns that pass their own ordinance, and many newer buildings are exempt. Rent increaseNew Jersey has no state cap on rent increases, but a landlord can't raise rent in the middle of a lease. They must end the current lease with proper written notice and offer a new one, and the increase can't be unconscionable, meaning shockingly unfair. Rental flood risk noticeA written notice that a 2023 New Jersey law requires covered landlords to give before a lease is signed or renewed. It says whether the rental is in a FEMA flood hazard area and whether the landlord knows it has flooded. Renters insuranceA policy that protects a renter's own belongings and covers you if you're found legally responsible for someone else's injury or property damage. Your landlord's insurance covers the building's structure, not your things. Residential leaseThe agreement that lets you live in a rental home in exchange for rent. In New Jersey a lease can be written or oral, and a written lease must use plain language that the average person can understand. Security depositMoney a landlord holds to cover damage or unpaid rent. For most New Jersey rentals it can't be more than 1.5 times one month's rent, it must earn interest that belongs to you, and it's due back within 30 days after your tenancy ends. Truth in RentingA free guide from the NJ Department of Community Affairs that explains the main legal rights of renters and landlords. Landlords of buildings with more than two units, or more than three if the owner lives in one, must give it to their tenants. Warranty of habitabilityA promise built into New Jersey residential leases, written or not, that the landlord will keep your home safe, sanitary, and fit to live in, with basics like heat, water, and working plumbing.

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