New Jersey funds schools and most municipal services through property tax, with 600+ school districts each setting local levies. Combined with high home values, this produces the 2.21% effective rate, highest in the nation. Suburban towns in Bergen, Morris, Somerset, and Union counties routinely have property tax bills above $15,000 annually on million-dollar homes. Recent state budgets have provided ANCHOR rebates to offset some of this burden.

ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) replaced the prior Homestead Benefit program. Homeowners earning under $150,000 receive $1,500 ($1,750 for seniors and disabled), with $1,000 ($1,250 for seniors) for those between $150,000 and $250,000. The benefit is delivered as a direct payment or property tax credit. Apply through the state Division of Taxation each year.

The state realty transfer fee is graduated from 0.4% on the first $150,000 up to 1.05% on amounts over $1 million, paid by the seller. On top of this, New Jersey imposes a 1% buyer mansion tax on residential sales over $1 million. So a $1.5 million home sale produces about $15,750 in seller realty transfer fee plus $15,000 buyer mansion tax. Total transaction taxes can exceed $30,000 on luxury properties.