Christie Directs All NJ Towns to Accept Prepaid Property Taxes
Gov. Chris Christie’s administration is requiring New Jersey municipalities to accept payments for 2018 property taxes and credit them as received in 2017, so long as they’re postmarked by Dec. 31.
Homeowners in some cities and towns have been prepaying their 2018 property taxes after changes in the federal tax reform enacted last Friday cap the amount of state and local taxes that can be deducted at $10,000, starting in 2018.
In an executive order issued Wednesday, Christie said that “not all municipalities have committed to assisting their resident taxpayers who might desire to prepay their 2018 property taxes in 2017” and that it’s important to ensure “equal treatment throughout the state.”
“The action I took today will ensure that local governments are flexible and accommodating of their local property taxpayers as we transition to the new federal tax code for 2018,” Christie said. “This executive order requires local officials to dedicate the resources and staffing to serve New Jerseyans who are planning in this way for their families and their futures.”
Senate President Stephen Sweeney, D-Gloucester, is urging the state Division of Local Government Services to instruct municipalities how to quickly issue property tax bills for the third and fourth quarters of 2018, but Christie's executive order doesn't mention that.
The new federal tax law caps so-called SALT deductions at $10,000.
ATTOM Data Solutions statistics show that property tax bills alone exceed $10,000 on roughly 25 percent of single-family homes and condominiums in New Jersey.
That includes nearly half of residences in Bergen and Essex counties and 37 percent to 44 percent of homes in Hunterdon, Morris, Passaic, Somerset and Union counties.
The SALT cap is expected to significantly reduce the number of taxpayers who itemize their deductions, as the $10,000 limit combined with other deductions, such as for mortgage interest, is less likely to top the standard deduction, which nearly doubles to $24,000 for a married-couple household.
Zillow projects that the share of homes where deductibility makes sense will drop in every county – including from 90 percent of homes to 19 percent in Middlesex County and from 87 percent to 16 percent in Passaic County.