Jersey City tax abatements explained: what you pay, when it steps up, and what happens when it ends

Exchange Place and Newport at twilight. Photo: Alfred Twu, CC0

A lot of the newer condo buildings in Jersey City don't pay regular property taxes. They pay the city a fixed annual charge instead, under a deal the developer signed years ago. That deal is the tax abatement, and it can be the difference between a monthly payment that works and one that doesn't.

It can also change while you own the unit, and it can end. Here is how it works, in plain English, so you can read the numbers on a building before you fall in love with the view.

Two different things are both called an "abatement"

When someone in Jersey City says a building is abated, they almost always mean one of two New Jersey programs:

• The long-term tax exemption, often called a PILOT (payment in lieu of taxes). It comes from the Long Term Tax Exemption Law, N.J.S.A. 40A:20. The city signs a financial agreement with the developer, and instead of taxes on the building the owners pay an "annual service charge." This is the one behind most of the big rental and condo towers.
• The five-year exemption and abatement, from N.J.S.A. 40A:21. It is smaller and shorter: part of the value of new construction or an improvement goes untaxed for up to five years. In Jersey City this program has lapsed for now (more on that below).

The first question I ask about any building is which of the two it has, because they behave very differently.

How a long-term PILOT works

Under 40A:20 the service charge is set as a share of the project's yearly gross revenue (at least 10% for market-rate housing) or, at the city's option, 2% of the total project cost. On top of that the city can add an administrative fee of up to 2% of the charge, and a share goes to Hudson County. The charge can never fall below what the land paid in taxes before the project was built.

The term is set in each building's financial agreement. The law caps it at 30 years from completion or 35 years from the date the agreement was signed. Jersey City's published PILOT policy, from 2015, sorts projects into tiers by location: about 10 years in the strongest areas such as the waterfront and downtown, and up to 30 years in areas the city wants to grow, with affordable-housing requirements attached.

The step-ups nobody mentions in the sales office

A PILOT is not flat for its whole life. The law builds in stages near the end, and in each stage you pay the higher of the base charge or a percentage of the full taxes the unit would otherwise owe:

• Stage 1: the base charge only, for the first 6 to 15 years
• Stage 2: at least 20% of full taxes
• Stage 3: at least 40%
• Stage 4: at least 60%
• Stage 5: at least 80%, for the final year or years

For a 10-year Jersey City agreement under the 2015 policy, that means the base charge for years 1 to 6, then 20%, 40%, 60% and 80% floors in years 7, 8, 9 and 10. When the agreement ends, the unit is assessed and taxed like any other property in the city.

So the question is never just "is it abated?" It is: what year of the schedule is the building in, and what will the payment be in the years I plan to own it?

If you buy a condo in an abated building

The abatement goes with the unit. Under N.J.S.A. 40A:20-14, a condo unit stays under the building's financial agreement when it is sold, the city does not have to approve the sale, and the buyer takes title subject to the service charge and whatever is left of the schedule.

The part that surprises people: where the agreement uses the condo method in the law, your charge is figured from your own purchase. The "gross revenue" for a unit is an imagined mortgage payment on the most recent arm's-length sale price, at the going mortgage rate on the day the deed is recorded, plus the unit's common charges. In plain terms, if you pay more than the last owner did, or rates are higher when you close, your annual charge can come out higher than the seller's. Some agreements use the project-cost method instead, so the only way to know is to read the building's agreement.

One more line in the same section matters to investors. The city may pass a resolution that ends the exemption, or raises the charge, for condo units whose owners don't live in them. I have not found a Jersey City resolution doing that, but if you plan to rent the unit out, have your attorney check during attorney review.

The five-year abatement in Jersey City, 2026

The five-year program used to help buyers of new one- to four-family homes and new condo units: the owner filed form E/A-1 with the Tax Assessor within 30 days of completion, and part of the new construction went untaxed for up to five years.

Jersey City's ordinance set the program to stop taking new applications from tax year 2026 unless the council renewed it. On September 23, 2026 the council voted down the ordinance that would have renewed and changed it, 3 to 6. Until the council acts again, no new five-year abatements are being granted in Jersey City. Abatements already granted keep running on their own schedules. If a seller or builder tells you a home "comes with the five-year abatement," ask for the approval in writing.

What else changed in Jersey City this year

• An audit of every long-term abatement. In January 2026 Mayor Solomon ordered a review of all active long-term abatements (the city counts over 100), due by July 1, 2026. I have not seen the results published.
• A school share. On September 23, 2026 the council approved an ordinance that lets the city put 10% of certain PILOT payments into a fund for school buildings. It changes where the money goes, not what owners pay.
• New 30-year PILOTs. The same night, the council approved two 30-year PILOTs for the Canal Crossing redevelopment, so long agreements are still being signed.

How I check a building before you commit

• The financial agreement and its schedule. Every Jersey City PILOT is approved by a council ordinance, and the agreement says which method sets the charge and when each stage starts.
• The current bill. The city's online tax inquiry by block and lot shows what the unit is billed today.
• The offering statement, for new construction. New Jersey requires the developer's public offering statement to show the estimated real estate taxes for each unit. Buyers get a seven-day window to cancel, so we read it together inside it. More on that on my new developments page.
• The years you will actually own it. I put the payment for each of those years on one page next to the mortgage and the common charges, so you can compare an abated unit with a fully taxed one on the same terms.

If you are selling an abated unit

Buyers shop by the monthly payment, and a buyer's agent who knows Jersey City will ask how many years are left. A unit with eight years of base charge ahead and one entering its 60% stage are not the same product, even with identical floor plans. I price that difference in the valuation instead of letting a buyer discover it at attorney review, and I put the schedule in the listing so the right buyers come in already knowing it.

Frequently asked questions

Want the real monthly number on a building?

Send me the building or the unit you are looking at. I will tell you whether it is abated, which kind, what year of the schedule it is in, and what the payment looks like for the years you plan to own it.

Work out what you can spend with my affordability calculator, or see the one-time costs at closing with the transfer fee and mansion tax calculator.

Bogdan Nicolae Rus · REALTOR®, eXp Realty LLC · NJ license #2186044
Jersey City · Hudson County · statewide in New Jersey · (201) 584-6156 · bogdan@bogdannicolaerus.com

This article is general information, not legal or tax advice, and it reflects the law and Jersey City actions as of October 26, 2026. Every building's financial agreement is different. Check the details for a specific unit with your attorney or the Jersey City Tax Assessor. Sources: N.J.S.A. 40A:20 (as amended by P.L.2025, c.91) and 40A:21; Jersey City PILOT and Tax Exemption Policy (2015); Jersey City Executive Order 2026-002; Jersey City Council actions of September 23, 2026.

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