Homeowners Are Paying More
There is a financial principle that has governed American investment law for decades — you do not pay taxes on gains you have not realized. If your stock portfolio doubles in value but you have not sold a single share, the government cannot tax that growth. It is one of the foundational protections of American economic life, built on the common sense idea that you cannot pay a tax bill with a number on a piece of paper.
Unless, apparently, you own a home in New Jersey.
While eleven Garden State towns quietly celebrated modest property tax decreases last year — a headline that sounds encouraging until you read the fine print — the broader story is one of a systematic financial squeeze that is doing something no other tax structure in America is permitted to do openly: taxing middle class families on wealth they have never actually received.
The Unrealized Gains Nobody Is Talking About
When your home appreciates in value, you have not made money. You cannot spend appreciation. You cannot pay your grocery bill with it, fund your child’s college with it, or put it in a savings account. The equity exists entirely on paper — until the day you sell, and even then New Jersey will find ways to take its share through transfer taxes and capital gains exposure.
But here is what is happening in towns across New Jersey right now: as home valuations surge — statewide the average home value hit $405,153 last year, a 5.8% increase in a single year — property tax assessments follow. Your tax bill rises not because you did anything differently, not because you consumed more municipal services, not because your children suddenly cost the school district more to educate. Your bill rises because the market decided your house is worth more on paper.
In any other investment context, taxing that unrealized appreciation would be constitutionally and legally controversial at minimum. In the property tax system it is simply Tuesday.
The average New Jersey homeowner paid $10,570 in property taxes in 2025 — a new record. That figure increased 4.7% in a single year. For a family whose income did not increase 4.7%, whose grocery bills already stretched the budget, whose healthcare costs climbed independently — that gap does not close itself. It comes out of savings, out of retirement contributions, out of the shrinking margin that used to be called the middle class cushion.
Eleven Towns Got Good News. The Math Is Still Brutal.
The data released by the New Jersey Department of Community Affairs does contain a sliver of genuine relief. Eleven towns saw their average property tax bills decrease by more than 1% between 2024 and 2025. It is worth acknowledging — and worth examining carefully.
Allenhurst, a beachfront Monmouth County borough of a few hundred residents and one of the wealthiest zip codes in the state, led the list with a decrease of just over 10%, bringing its average bill down to $19,640. Shrewsbury Township came in second with a 9.21% decrease, landing at $5,127. Alpha in Warren County, Fairfield in Essex, and Franklin in Warren County rounded out the top five.
The full list of towns seeing decreases of more than 1%:
● Walpack in Sussex County dropped just $13 to an average of $1,143 — the smallest dollar decrease on the list. Morris Township in Morris County fell $139 to $11,253.
● Harmony in Warren County decreased $89 to $5,657.
● Stow Creek in Cumberland County dropped $90 to $5,383.
● West Cape May fell $191 to $7,120.
● Far Hills in Somerset County decreased $453 to $15,004.
● Franklin dropped $338 to $9,600.
● Fairfield fell $481 to $11,045. Alpha decreased $295 to $6,415.
● Shrewsbury Township dropped $520 to $5,127.
● Allenhurst led with a $2,218 decrease to $19,640.
An additional ten towns saw decreases of less than 1%.
These decreases occurred for a number of reasons that have nothing to do with government restraint or taxpayer relief — cheaper housing being built shifts the average downward, reassessments can lower valuations on some existing homes, and demolitions remove higher-valued properties from the calculation. In other words, the average bill in a town can fall even while individual homeowners see no relief whatsoever.