Jersey City's five-year tax exemption came with an expiration date, and that date has arrived. Chapter 304 of the municipal code says no application can be filed for an exemption "to take initial effect for tax year 2026 or any tax year thereafter" unless the City Council readopts the ordinance. On September 23, 2026, the council voted 3–6 against the ordinance that would have readopted it.
So "five-year abatement" on a new-construction listing in Jersey City is now a claim to check. For years, buyers of new condos and townhomes could treat it as nearly automatic. A home whose exemption already started runs on a different clock than one finishing this fall.
What happened at the September 23 meeting
The defeated measure, Ord. 26-080, would have moved the sunset out to 2036 and changed the rules for who qualifies. When council members pressed on timing, Corporation Counsel Sarah Levine laid out what was at stake. Hudson County View reported her words this way:
"There is a sunset provision in the existing ordinance, and so, this law has sunset: The city cannot grant any abatements in 2026 unless it adopts an ordinance like this, and it needs to do so for the assessor's purposes prior to her timelines for issuing those abatements."
According to the same report, Levine said the tax assessor had to meet an October deadline to consider applications already submitted. She wasn't sure of the exact date. Several council members said they needed more time. Ward D Councilman Jake Ephros and Ward E Councilwoman Eleana Little both said they couldn't support the ordinance as written. Council President Denise Ridley, Ward F Councilman Frank Gilmore, and Councilman at-Large Michael Griffin voted yes.
No replacement appears on the October 7 council agenda, which lists no ordinance about Chapter 304. The next caucus is set for October 19 and the next regular meeting for October 21. As of October 11, nobody can say whether the program will come back for 2026, in what form, or when.
A new condo's exemption is 30 percent of value, not a phase-in
Ask around about Jersey City's five-year abatement and most people describe a ramp: no tax on the building in year one, then 20, 40, 60, and 80 percent, then the full bill in year six. That schedule is real. Better Blocks NJ describes it in a March 2026 explainer. The city's program is technically an exemption on improvements, so the owner pays full conventional tax on the land the whole time.
The ordinance text splits the exemption into separate tracks, though. The phase-in schedule belongs to new multiple dwellings and commercial projects built under tax agreements. A new house or an individually sold condo unit falls under a different section.
| Exemption track in Chapter 304 | What gets exempted | How long |
|---|---|---|
| New dwellings and conversions to dwelling use, including individually conveyed condo units | 30% of the assessor's full and true value of the dwelling built is treated as not increasing the property's value | Five years |
| Improvements to dwellings more than 20 years old | The first $25,000 of assessed improvement value per affected unit | Five years |
| New multiple dwellings and commercial or industrial projects under tax agreements | Payments start at 0 percent of conventional taxes in year one, then must be no less than 20, 40, 60, and 80 percent in years two through five | Five years, full taxes after |
For a buyer, the 30 percent track is the one that usually matters. It also changes the math. A new condo owner whose unit has the exemption still pays tax on most of the building's assessed value starting in year one. The exemption takes 30 percent off that value for five years. Then it ends all at once, with no ramp.
Jersey City calculates the conventional bill by dividing assessed value by 100 and multiplying by the tax rate. The state's 2025 table puts the city's general tax rate at $2.335 per $100 of assessed value. Take a hypothetical unit with $500,000 of assessed improvement value. The 30 percent exemption would set aside $150,000 of that, worth about $3,500 a year at the 2025 rate. That figure is only an illustration. Real bills depend on each property's assessment and on rates the city doesn't set alone.
Why the missing exemption costs more in 2026
The tax base the exemption shields from is getting more expensive. Jersey City adopted its 2026 municipal budget on August 26, with total appropriations of $886,416,892.79. NJ.com reported that the adopted budget carries a 15.15 percent property-tax increase, about $597 a year for the average homeowner.
The overall 2026 rate isn't settled yet. The city's 2026 estimated tax calculator says it uses proposed rates. The municipal, county, and Board of Education rates are each set separately. For a buyer underwriting a new condo this fall, both pieces are uncertain: the rate the full assessment will be taxed at, and whether any of that assessment will be exempt.
This also matters in pricing. In a December 2025 interview with Real Estate NJ, former Mayor Steven Fulop said developers' expected abatements were factored into what they paid for land. In other words, the benefit a buyer thinks they're getting may already have gone to someone earlier in the chain. If a project's pro forma counted on an exemption that the city now can't grant, the question is who absorbs that gap.
What the council is still arguing about
The failed ordinance shows where the program is likely to go. It would have required owners of one-to-four-family homes and residential condo units with an abatement to live there as their primary residence for at least five years after construction. Owners would have certified that every year, and the assessor could have ended the exemption and taken back exempted amounts if they didn't comply.
That rule wasn't adopted. Still, the debate around it is directly about resale. According to Hudson County View, Ward C Councilman Tom Zuppa said residents were worried about developers tearing down, building new, and selling to buyers who keep the abatement. Business Administrator Ruby Choi said she would follow up with the tax assessor on the data. Gilmore also said the ordinance didn't clearly spell out how timelines and property transfers would work.
A future version of the program could treat a home bought to live in differently from a unit bought to rent out, and that would change who the exemption is worth something to. Anyone comparing investment purchases with owner-occupied ones, in places like Bergen-Lafayette or around Journal Square, would feel that directly.
Long-term PILOTs run on a separate clock
The five-year exemption is easy to mix up with long-term PILOT agreements, which mostly cover larger waterfront buildings. A PILOT replaces conventional taxes with a payment usually based on the building's gross revenue. It typically lasts 10 to 30 years. When it ends, the property pays full conventional taxes. The September vote had nothing to do with those agreements, but some of them are reaching their end dates now.
An analysis by JC Open Funds of the state's 2026 PILOT database counted 38 active Jersey City agreements set to reach their published end dates by 2029. It modeled a $38.8 million annual gap between current PILOT billing and conventional taxes, and it calls that figure a snapshot, not a forecast. Named entries include:
- Harborside Unit A, ending February 28, 2027
- Gulls Cove, ending January 9, 2028
- 70 Greene, ending May 31, 2029
- 77 Hudson, ending June 23, 2029
The same analysis cautions that a published end date doesn't tell you when the first conventional bill arrives, whether the agreement was amended, or how final accounting was handled. Long-term agreements are also getting a closer look. Mayor James Solomon, sworn in January 15, 2026, ordered an audit of more than 100 active long-term abatements, with completion targeted for July 1, 2026. We haven't found any published results from that audit.
Questions to answer before the contract is signed
Every new-construction or recently built home in Jersey City now comes with a few questions about its tax status:
- Which track, if any, applies? A 30 percent dwelling exemption, a phase-in under a tax agreement, and a long-term PILOT produce very different bills.
- What tax year did it start? The sunset clause applies to exemptions taking initial effect in 2026 or later, so the start year makes a big difference.
- Is it on the assessor's record? The Tax Assessor's page still posts five-year application forms dated June 2, 2025. Those forms are older than the 2026 sunset debate and don't show that the program is currently open.
- For a PILOT building, what does the governing agreement say? That includes its end date and how the building returns to conventional assessment.
- What happens October 21? If the council takes up a revised ordinance, the answer could change for homes finishing this year.
FAQ
Do homes that already have a five-year exemption lose it? The sunset clause is written around exemptions taking initial effect in 2026 or later. Confirm any specific property's status with the Jersey City tax assessor.
Is the owner-occupancy requirement in effect? No. It was part of Ord. 26-080, which was defeated on September 23, 2026.
Does any of this affect PILOT payments to schools? That's a separate effort. In June 2026, the city proposed sending 10 percent of service-charge revenue from certain residential PILOTs to school capital projects. The city described it as a proposal that needed council approval.
Hudson Realty Group looks up the tax status of every new-construction and recently built home we show or list in Jersey City: the exemption track, its start year, and the assessor's record. We'll keep following the council's next steps on Chapter 304. If you're pricing a new condo or townhome this fall, Contact Us and we'll go through the numbers with you.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
