UPDATE: See Bergen County Tax Rates 2017-2018.
Compare Bergen County Property Tax Rates
Before you scroll to the bottom of the chart, can you guess which areas in Bergen County have the highest effective tax rates?
In December, the State of NJ published updated tax info for every borough, township, village and city in Bergen County. The three most important data points are the General Tax Rate, the Equalization Ratio and the Effective Tax Rate.
The General Tax Rate is a raw data point which shouldn’t be used for comparison purposes. That’s because homes are assessed differently from one area to the next. In one borough, homes may be assessed at 80% of market value while in another they may be at 100% of market value. Since tax rates are applied to assessed values and not market values, comparing General Tax Rates isn’t a fair comparison.
Which is the reason for the Effective Tax Rate. This is an adjusted figure which takes into account the ratio of assessed value to market value. This ratio, the Equalization Ratio, is multiplied by the General Tax Rate to determine the Effective Tax Rate.
For example, Saddle River has a higher General Tax Rate than Englewood Cliffs. But because Saddle River homes are assessed lower than homes in Englewood Cliffs, the Effective Tax Rate is lower in Saddle River.
For a video further explaining effective tax rates, see Understanding Equalized (or Effective) Tax Rates.
2015 Effective Tax Rates for Bergen County
The bottom line is the areas in Bergen County with the lowest Effective Tax Rates are Alpine, Saddle River, Englewood Cliffs, Rockleigh and Teterboro. (Did you guess it would be Paramus?)
The five with the highest Effective Tax Rates are Bogota, Bergenfield, Lodi, Hackensack and Ridgefield Park.
It can be noted that higher taxes do not correlate with better schools – in fact it’s quite the opposite. Alpine and Saddle River have some of the best schools in the state while none of the high schools in the second group crack the top 100, according to NJ Monthly Magazine. (Read more about the best schools in New Jersey.)
Another conclusion that can be drawn is that areas with more expensive homes have lower tax rates. The average sold price in Alpine was $2,253,000 in 2014 while in Bogota it was $313,000*.
If you’re interested in buying or selling in any of these areas, please register or call me at 201-421-0506 cell.