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S1759 SBA Statement 6/4/26
SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
SENATE, No.
1759
STATE
OF NEW JERSEY
DATED:
�JUNE 4,
2026
����� The Senate Budget and Appropriations Committee reports
favorably Senate Bill No. 1759.
����� As reported, this bill amends the �Property Tax
Deduction Act,� (C.54A:3A-15 et seq.) to provide additional tax relief for
property taxpayers by increasing, from 18 percent to 30 percent, the amount of
rent defined as �rent constituting property taxes,� and increasing, from $50 to
$250, the property tax credit that certain individuals may elect to receive in
lieu of an income tax deduction.
����� Under the �Property Tax Deduction Act,� a taxpayer is
entitled to a deduction of up to $15,000 from gross income for property taxes,
or the rental equivalent thereof paid by tenants, due and paid for that
calendar year on a taxpayer�s homestead.� For tenants, the amount of the
deduction is based on the amount of �rent constituting property taxes.��
Current law sets the amount of rent constituting property taxes at 18 percent
of the rent paid by the taxpayer during the taxable year, for a unit of residential
real property, which the taxpayer occupies as a principal residence.� This bill
increases the amount of rent constituting property taxes from 18 percent of
rent paid to 30 percent of rent paid.
����� Increasing the limitation on the amount of rental
payments defined as �rent constituting property taxes� would allow eligible
gross income taxpayers to deduct a higher amount of rent from their gross
income, thereby lowering the amount of the taxpayer�s gross income subject to
taxation and reducing a tenant�s tax burden.
����� The bill also increases, from $50 to $250, the
property tax credit that certain individuals who paid property taxes or rent
constituting property taxes may elect to receive instead of the gross income
tax deduction.� This credit is available to State gross income taxpayers, as
well as residents who are 65 years of age or older or who are allowed to claim
a personal deduction as a blind or disabled taxpayer, but who are not subject
to gross income taxation.
FISCAL IMPACT
:
����� The Office of Legislative Services (OLS) estimates
that this bill will reduce annual State revenues deposited into the Property
Tax Relief Fund by approximately $127.2 million to $231.5 million by increasing
the amount of rent constituting property taxes that certain taxpayers may
deduct from taxable income under the gross income tax.� For the purposes of
this analysis, the OLS estimates that roughly 1.1 million renter households
will benefit from increasing the amount of rent constituting property taxes from
18 percent to 30 percent.
����� In lieu of claiming a deduction for rent constituting
property taxes paid in a taxable year, current law allows certain taxpayers to
claim a gross income tax credit of up to $50.� By increasing the maximum credit
to $250, the OLS estimates that the bill will cause approximately 170,000
renters, with monthly rents below $1,000, to elect to claim the increased gross
income tax credit instead of the deduction.