Cost of Living in New Jersey
Things cost about ▲ 9% more in New Jersey than the national average.
What Things Cost in New Jersey
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
New Jersey has the highest property taxes in the nation. That single fact dominates the financial conversation about living here. The effective rate of about 2.23% means a home assessed at $450,000 generates roughly $10,000 per year in property taxes. Combined with a graduated income tax reaching 10.75% and generally above-average costs for everything else, New Jersey is expensive by any measure. The counterarguments are real: excellent schools, proximity to both New York and Philadelphia, one of the highest median incomes in the country, and a density of jobs in pharma, finance, and tech that supports those high costs.
New Jersey at a Glance
Taxes in New Jersey
New Jersey's state income tax tops out at Up to 10.75%. The combined sales tax averages 6.625%. Property taxes run about 1.88% of home value, which on a $450,000 median home means roughly $8,460/year.
Cities in New Jersey
Ranked from least to most expensive. Index 100 = national average.
Explore New Jersey
FAQ About New Jersey
New Jersey has hundreds of municipalities, school districts, and special districts, each with taxing authority. The state has traditionally funded less of local education costs than most states, pushing the burden onto property owners. Strong public employee unions have negotiated generous pension and benefit packages that local governments must fund. The result: an effective property tax rate of about 2.23%, the highest nationally. A $500,000 home can cost over $11,000 per year in property taxes.
For families with children, the case is strong: many New Jersey school districts are among the best in the nation. Proximity to New York and Philadelphia provides exceptional job market access. Median household income exceeds $89,000, which helps absorb the costs. For retirees or single people without school-age children, the value proposition is harder to justify, and many relocate to lower-cost states once the school years are over.
New Jersey has a graduated income tax with seven brackets ranging from 1.4% to 10.75%. The top rate applies to income above $1 million. For a household earning $150,000, the effective state income tax rate is roughly 5-6%. Combined with property taxes averaging 2.23%, the total tax burden is among the highest in the country.