Bill > A5814

Introduced Session

This bill would direct the Legislature to allow certain municipalities to establish a "land-based property tax system," in which a lower property tax rate is set for improvements than for land. An improvement refers to a building or other man-made condition located on a parcel of real property. Historically, New Jersey municipalities have been required to apply a single value-based tax rate to both land and improvements. Land-based property tax systems have been employed by municipalities in several other states in order to discourage land speculation, while encouraging the redevelopment of vacant land in urban areas. The bill allows current and former urban enterprise zone municipalities to adopt an ordinance providing for a land-based property tax system upon the bill's operative date, without any application process Beginning seven years later, the bill allows municipalities, other than current and former UEZ municipalities, to apply to the Director of the Division of Taxation in the Department of the Treasury ("director") for approval to adopt an ordinance to implement a land-based property tax system. The bill requires the director to adopt rules and regulations to establish appropriate standards for approval. These standards must prohibit approval of a municipality if its developable and re-developable lands are used substantially for the preservation of open space, farmland, or environmentally sensitive land. The bill permits the adjusted tax rates of a land-based property tax system to be phased in such that the difference between the rates grows only gradually each year. The bill also directs that a municipality employing a land-based property tax system may return to a single-rate property tax system if the governing body adopts an ordinance directing this return. This ordinance may also phase in these adjusted tax rates such that the difference between the rates narrows only gradually in any given year. The bill would become operative upon the adoption by the voters of the State of an amendment to the State Constitution authorizing municipalities, by ordinance, to adopt a property tax system under which taxable improvements are taxed at a lower rate than taxable land.

AI Summary

Committee Categories

Antwan McClellan (R)*,  Shavonda Sumter (D)*, 

Introduced, Referred to Assembly State and Local Government Committee (on 12/04/2023)

Official Document