New Jersey Assembly Bill A2614

New Jersey 2022-2023 Regular Session

• Introduced: 2/14/22
• Refer: 2/14/22

Caption

Increases maximum allowable five-year property tax exemption and abatement for improvements to certain dwellings located in areas in need of rehabilitation.

Impact

The bill empowers municipalities to adopt ordinances that allow for broader and varied property tax exemptions and abatements relative to dwelling improvements. Given the flexibility to tailor these exemptions based on the nature, cost of improvements, and neighborhood characteristics, local governing bodies can now foster more nuanced approaches to enhancing aging residential areas. Supporters of the bill argue that these measures will spur economic development and housing improvement initiatives, thus revitalizing communities that have suffered from neglect and decline over the years. It’s anticipated that this will lead to improved living conditions, increased property values, and potentially higher tax revenue in the long run due to increased property values.

Summary

Bill A2614 proposes an increase to the maximum allowable five-year property tax exemption and abatement for improvements made to certain dwellings situated in areas recognized as in need of rehabilitation. The current limit for such exemptions has not been updated since the law was enacted in 1991, with maximum allowances capped at $25,000 depending on the municipality's specific ordinance. A2614 seeks to significantly enhance this by proposing an exemption amount of up to $50,000 during the initial year of its enactment, adapting further according to the Consumer Price Index (CPI-U) in subsequent years. This adjustment aims to keep the incentive relevant to contemporary economic conditions and cost factors associated with property improvements.

Contention

While the bill represents a significant potential boost for local rehabilitation efforts, some voices in the legislative discussions caution against its possible misapplication. Critics suggest that there could be uneven outcomes across various municipalities, where not all communities may benefit equally from the exemptions offered. Furthermore, concerns have been raised regarding the fiscal implications for municipalities that might experience revenue shortfalls due to increased exemptions, thereby impacting other public services. It's essential to strike a balance between incentivizing residential improvements and maintaining fiscal stability within communities.