July 26, 2021

MSW Property Tax Update: New Legislation Proposes Amendments to the Garden State Growth Zone Property Tax Exemption Program

Recent proposed amendments to the Garden State Growth Zone (“GSGZ”) property tax exemption program are good news for developers and certain municipalities in the State seeking to take advantage of this important tax incentive. The bill (A5683/S3869) passed both houses on June 30, 2021 and would expand the program by changing three key provisions.

First, the amendment expands eligibility and permits certain municipalities that did not opt-in to the program by the initial deadline in 2013, to opt-in within 90 days of enactment of the legislation. Specifically, the bill expands the definition of a “Garden State Growth Zone” to include a “government-restricted municipality.” This definition includes municipalities with a Municipal Revitalization Index distress score of at least 75 and municipalities designated as urban aid municipalities for the 2019 State fiscal year — specifically, Paterson, Trenton and Atlantic City. The bill allows municipalities designated as a “government-restricted municipality” to opt-in to the GSGZ exemption program, by ordinance, within ninety days of its enactment.

Second, the bill permits expansion of the length of the tax exemption for properties in a “government restricted municipality.” The current program allows for a twenty-year property tax exemption which begins on the date the developer receives the final certificate of occupancy. The amendment would permit extension of the exemption period to thirty years. Importantly, this extension would not only apply to new applications, but also permits the Tax Assessor to extend the prior-existing twenty-year exemption to thirty years.

Finally, the bill extends the construction timeline required under the existing Act for properties in a  “government restricted municipality.” Under the current law, the final certificate of occupancy must be issued within ten years of the enactment of the 2013 Act. This amendment would extend this deadline to fifteen years from enactment.

For more information on the MSW Property Tax Practice Group, please contact Thomas S. Dolan, Esq. at (973) 705-7412 or tdolan@murphyllp.com.

Murphy Schiller & Wilkes LLP (MSW) is a boutique law firm servicing the commercial real estate and construction industries. Headquartered in Newark, New Jersey, the firm services the commercial real estate and construction industries. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.