How property taxes are estimated
Property taxes are one of the biggest parts of a monthly payment in New Jersey and on Long Island, and they vary a lot from one town to the next. This estimator applies a yearly tax rate to the home’s price. Where the rate comes from depends on the state.
New Jersey
We use the state’s official effective tax rate for each municipality, published by the New Jersey Division of Taxation. A town’s general tax rate applies to assessed value, which is often out of date; the effective rate adjusts it to market value, so it can be applied to a purchase price. Enter the town if the ZIP code covers more than one, since neighboring towns can differ by a full percentage point.
Long Island
Taxes on Long Island depend on the school district and village as well as the county and town, and there’s no official table of effective rates by district. We use a county-wide figure from the Census Bureau: the median tax bill divided by the median home value. Ask for the home’s current tax bill and check whether it has a STAR credit or exemption.
California
Under Proposition 13, a home’s assessed value resets to the purchase price when it sells, and the base tax is 1% of that value plus voter-approved bonds and charges, usually bringing the total to about 1.1% to 1.3%. Assessed value can then rise by no more than 2% a year. Expect a one-time supplemental bill after you buy, covering the rest of the tax year at the new value.
An example
A $650,000 home in a New Jersey town with a 2.5% effective rate would have taxes of about $16,250 a year, or $1,354 a month. A $1,500,000 home in San Francisco, where the 2025–26 rate is about 1.18%, would owe about $17,740 a year.
Common mistakes
- Using the seller’s tax bill in California. It reflects what they paid, not what you’ll pay.
- Assuming a new town’s taxes match your current one.
- Forgetting that lenders often collect taxes monthly in escrow, which is part of your payment.
Questions buyers ask
Why are New Jersey property taxes so high?
New Jersey funds schools and local services largely through property taxes, and many towns run their own schools and services, so the property tax carries more of the cost than in many states.
Will my taxes go up after I buy?
In California they reset to your purchase price. In New Jersey and New York, a sale can prompt a reassessment in some towns, and rates change every year.
Are property taxes included in my mortgage payment?
Often, yes. Many lenders collect them monthly in an escrow account and pay the bills for you.