Trenton – Acting to reduce the property tax burden, provide savings for renters and mortgage relief for homeowners, a Senate committee today approved three bills designed to deliver financial savings to New Jersey residents.
Sponsored by Senator Troy Singleton and Senate President Nick Scutari, the bills would boost municipal payments from energy tax receipts, increase the tax deduction for renters, and allow for a mortgage forbearance for homeowners experiencing financial hardship.
The measures were voted out of the Senate Community and Urban Affairs Committee in the first hearing of a Senate committee in the new legislative session.
“For the residents of New Jersey, affordability is the most pressing issue and property taxes are the greatest burden,” said Senator Scutari (D-Union/Middlesex/Somerset). “These bills will provide immediate and long-term financial relief to homeowners and renters working hard to support themselves and their families.”
“It is no coincidence that the very first Senate committee hearing of the new legislative session is focused on tackling our State’s high property taxes and making our state more affordable,” said Senator Singleton (D-Burlington), who chairs the Senate Community and Urban Affairs Committee. “The measures we passed today seek to not only reduce the property tax burden on our families, but provide much needed savings for renters and deserved mortgage relief for homeowners.”
The first bill, S-330, would substantially increase the amount of money distributed to municipalities from the Energy Tax fund. Municipalities would be required to use 100 percent of the new funds to reduce their property tax levy.
The phased increase of payments from the “Energy Tax Receipts Property Tax Relief Fund” collected from utilities would reach $331 million annually after five years, restoring the amount that has been diverted by the state in recent years.
“This is direct tax relief to cities and towns throughout New Jersey that will help ease the burden for those who ultimately pay property taxes – homeowners, businesses and renters,” said Senator Singleton. “This will restore funding so that municipalities can lower the amount they are required to raise through taxes or lower property taxes altogether.”
Also approved by the committee was legislation, S-343, that would increase the tax deduction for renters. The upward adjustment would allow tenants to increase their income tax deduction from 18 percent to 30 percent.
“Renters pay property taxes too,” said Senator Singleton. “The higher deduction results in real savings for tenants. This translates into a $180 million tax cut for those who need it most, working people and low-income families.”
Senator Singleton noted that there are 1.2 million rental properties in New Jersey, which has the fourth most expensive rental market in the country.
The committee also endorsed a bill, S-344, extending to homeowners and small business landlords a grace period on mortgage payments if they have experienced financial hardship due to the pandemic.
The mortgage extension required of banks would allow more time to make payments for those who lost their jobs, saw their income drop substantially, or were hit with higher expenses because of Covid-created conditions. The initial forbearance would be for 90 days, with a possible extension of an additional 90 days.
The “fair mortgage forbearance” would be directed at those most in need, residential homeowners with incomes below 150 percent of the area’s median and savings worth no more than six months of household income.
“These bills are the next steps we are taking to make it easier to afford to live, work and raise a family in New Jersey,” said Senator Scutari. “They won’t solve the affordability crisis by themselves, but they are steps in the right direction.”
In addition to the bills acted upon today, Senator Singleton also introduced legislation that would increase the refundable gross income tax credit for property taxes from $50 to $200.
The committee approved all three bills with unanimous votes.