Division of TaxationHomeowners and renters who pay property taxes on a primary residence (main home) in New Jersey, either directly or through rent, may qualify for either a deduction or a refundable credit when filing an Income Tax return.
You can claim only one of these benefits on your tax return. If you meet the eligibility requirements, follow the instructions in the New Jersey Resident Income Tax return (Form NJ-1040) to determine if the credit or deduction will give you the greater benefit.
We audit returns to make sure homeowners and renters meet the eligibility requirements.
You are eligible for a property tax deduction or a property tax credit only if:
Residents with gross income of $20,000 or less ($10,000 if filing status is single or married/CU partner, filing separate return) are eligible for a property tax credit only if they were 65 years or older or blind or disabled on the last day of the tax year.
The property tax deduction reduces your taxable income. You can deduct your property taxes paid or $15,000, whichever is less. For renters, 18% of rent paid during the year is considered property taxes paid. Keep in mind that the amount of property taxes paid that you can deduct depends on a number of factors, such as the number of owners or units. See "Determining the Amount of Property Taxes Paid" below for more information.
The property tax credit reduces your tax due because it is subtracted directly from your tax liability. The benefit is a refundable credit of $50.
Age 65 or Older and/or Disabled. If you (or your spouse/civil union partner, if filing jointly) were 65 or older, or blind or disabled on December 31 of the tax year, your income was below the filing threshold amount for your filing status, and you satisfy the eligibility requirements, you can claim your credit on the New Jersey Resident Income Tax Return, Form NJ-1040, or you can file the Property Tax Credit Application, Form NJ-1040-HW . Do not file both Form NJ-1040 and Form NJ-1040-HW.
Under Age 65 and Not Disabled. If you are not required to file a return because your income was below the filing threshold amount for your filing status, you are not eligible for a property tax credit.
For more information on the property tax deduction or credit, see the New Jersey Resident Income Tax Return instructions .
Multiple Owners. If you owned your principal residence with someone who was not your spouse/civil union partner, only the amount of property taxes that reflects your percentage of ownership in the property, as shown on the deed of record, can be used when calculating the property tax deduction or credit.
Example: You and your spouse owned a single-family home with your sister. You lived in the home with your spouse. Your sister did not live with you, and you and your spouse paid all the property taxes. You can only claim one-half of the taxes paid because you and your spouse owned only one-half (50%) of the property. To determine your share of the property taxes paid, use Worksheet G in the New Jersey Resident Income Tax Return instructions . The taxes must be apportioned even if only one of the owners occupies the property and pays all of the taxes.
Multi-Unit Properties. If you owned a multi-unit property and occupied a portion of the property as your principal residence, only the amount of property taxes paid for the unit that you occupied as your principal residence can be used when calculating the property tax deduction or credit. The taxes must be apportioned equally among the number of units, unless the local tax assessor has determined that the units are not equal in size.
Example: You owned a four-unit property. The units were equal in size, and one of the units was your principal residence. You must enter one-fourth of the taxes paid because you occupied one-fourth (25%) of the property as your principal residence. Use Worksheet G in the New Jersey Resident Income Tax Return instructions to determine the amount. Note: A condominium unit or a unit in a cooperative housing complex or mutual housing corporation is considered a single-family dwelling.
Multiple Tenants. If you occupied and shared rent for an apartment or other rental dwelling unit with someone who was not your spouse/civil union partner, use only your share of the rent constituting property taxes paid when calculating the property tax deduction or credit. To determine the amount, use Worksheet G in the New Jersey Resident Income Tax Return instructions . Note: For tenants, 18% of the rent paid during the year is considered property taxes paid.
Multiple Residences. If you lived in more than one New Jersey residence during the year, you must determine the total amount of property taxes (and/or 18% of rent) to use when calculating the property tax deduction or credit by completing Worksheet G in the New Jersey Resident Income Tax Return instructions .
Part-Year Residents. If you were a part-year New Jersey resident, and you were either a qualified homeowner or tenant, or both a homeowner and a tenant during the part of the year you lived in New Jersey, use the amount of property taxes (or 18% of rent) due and paid during your period of residence. Note: Use Worksheet G and Worksheet H in the New Jersey Resident Income Tax Return instructions to determine the total amount of property taxes to use when calculating the property tax deduction/credit.
File Separate Returns but Maintain Same Principal Residence. If you and your spouse/civil union partner file separate returns but maintain the same principal residence, only one-half of the property taxes (or one-half of 18% of rent) due and paid can be used when calculating the property tax deduction or credit.
Senior Freeze Applicants. When calculating the property tax deduction or credit for Tax Year 2025, do not use the amount of property taxes (or mobile home site fees) paid for 2025. You must use the amount reported on your Property Tax Reimbursement application, Form PAS-1, as follows:
Additional information on the deduction or credit is contained in the New Jersey Resident Income Tax Return instructions .
Official Site of The State of New Jersey