Compare taxes and see how much you save moving from California to New Jersey
California and New Jersey consistently rank as two of the highest-taxed states in the US — but they impose that burden differently. California's progressive income tax (up to 13.3% including the 1% mental health surtax on $1M+) reaches the highest state income tax rate in the nation. New Jersey's top income tax rate of 10.75% is lower than California's, but New Jersey has the highest property tax burden in the US at approximately 2.47% effective rate — on a $600,000 home, that is $14,820/year. California's Prop 13 caps property tax at 1% of purchase price plus maximum 2% annual increases. For a $1M California home purchased 10 years ago at $800,000: property tax approximately $8,800/year. Equivalent NJ property: $24,700/year. For homeowners at most income levels, New Jersey's property tax advantage over California is massive — even given California's higher income tax rates. For renters, California's income tax is clearly worse.
Top Rate (above $1M)
9.3% at $68K single; mental health surtax 1% on $1M+; 9 progressive brackets
Top Rate (above $1M)
Highest property tax in US at ~2.47%; millionaires surcharge; NYC commuter state
At $200,000 income:
That is $667/month back in your pocket!
| Income | CA Tax | NJ Tax | Savings | 10-Year |
|---|---|---|---|---|
| $100,000 | $6,685 CA income tax (~6.7% effective); ~$3,000 property (median $800K Prop 13 basis) = ~$9,685 | $4,575 NJ income tax (~4.6% effective); ~$10,000 property (median $400K × 2.47%) = ~$14,575 | CA cheaper by ~$4,890 for homeowners | CA better for homeowners at this income |
| $150,000 | $11,590 CA income tax (~7.7% effective); ~$3,000 property (Prop 13) = ~$14,590 | $7,850 NJ income tax (~5.2% effective); ~$12,350 property ($500K × 2.47%) = ~$20,200 | CA cheaper by ~$5,610 for homeowners; NJ cheaper for renters | Depends on homeownership |
| $200,000 | $17,540 CA income tax (~8.8% effective); ~$4,000 property (Prop 13) = ~$21,540 | $13,185 NJ income tax (~6.6% effective); ~$14,820 property ($600K × 2.47%) = ~$28,005 | CA cheaper by ~$6,465 for homeowners; NJ saves ~$4,355 for renters | $64,650 |
| $400,000 | $39,985 CA income tax (~10% effective); ~$5,000 property (Prop 13) = ~$44,985 | $30,845 NJ income tax (~7.7% effective); ~$19,760 property ($800K × 2.47%) = ~$50,605 | CA cheaper by ~$5,620 for homeowners; NJ saves ~$9,140 for renters | Depends on homeownership |
| $1,000,000 | ~$121,700 CA income tax (incl. 1% surtax); property Prop 13 = ~$127,700 | ~$101,475 NJ income tax; ~$37,050 property ($1.5M × 2.47%) = ~$138,525 | NJ saves ~$4,000 for renters; CA saves ~$10,825 for homeowners (Prop 13 advantage) | Complex — depends on homeownership and time in state |
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Moving between California and New Jersey? California's residency audit risk, Prop 13 implications, and equity compensation tax treatment require specialist guidance. Get matched with a CPA who knows high-tax state moves.
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Get Matched With a CPA →Yes — enormously so for long-term homeowners. Prop 13 caps property tax at 1% of the assessed value at purchase, with a maximum 2% annual reassessment increase. A California home purchased in 2005 for $500,000 would have an assessed value today of approximately $745,000 (2% compounded 20 years), with a property tax bill of approximately $7,450/year — regardless of the home's actual current market value of $1.5M+. The same home in New Jersey at $1.5M current value would carry a $37,050/year tax bill. For long-term California homeowners, Prop 13 creates a hidden subsidy worth $15,000–30,000+/year vs comparable New Jersey properties. This is why many wealthy Californians resist leaving — they'd lose their Prop 13 protection permanently.
California is significantly worse for high-income renters. Renters don't benefit from Prop 13's property tax protection, so the comparison is purely on income tax. At $300,000 income: California income tax approximately $27,000 vs New Jersey's approximately $21,300. At $500,000 income: California approximately $53,000 vs New Jersey approximately $41,000. California's extra income tax burden of $6,000–$12,000/year at these income levels is the dominant factor for renters. NJ's high property tax doesn't hurt renters directly (landlords pay it; renters pay it indirectly through rent, but the relationship is less direct).
New Jersey's average effective property tax rate of approximately 2.47% is the highest in the United States. The causes: New Jersey funds public education almost entirely through local property taxes with limited state redistribution; New Jersey has 564 municipalities, each with their own budget requirements; and the state's high cost of living means even 'average' services cost more. Rates vary widely by town: Hoboken and Jersey City (which generate local income from dense development) can be under 1.5%; rural and suburban municipalities with lower commercial tax bases can exceed 3.5%. The practical result: a typical $500,000 home in suburban New Jersey (Morris County, Bergen County) carries a property tax bill of $10,000–18,000/year.
California is significantly worse for equity compensation. California taxes capital gains at ordinary income rates (up to 13.3%) — there is no preferential capital gains rate at the state level. Long-term gains that would receive a 0–20% federal rate still face California's full progressive income tax. New Jersey has a similar issue: NJ also taxes capital gains at ordinary income rates (no preferential state rate). However, NJ's top rate (10.75%) is lower than California's (13.3%). For large tech equity events: California vs NJ makes a $5,000–$15,000/year difference for tech workers with significant RSU or option exercises. Both states pale vs Texas, Florida, or Nevada which charge zero on capital gains.
For homeowners: often not worth it. New Jersey's property tax (~2.47%) is far higher than California's Prop 13-protected rates for long-term California homeowners. A California homeowner with a Prop 13 bill of $8,000/year on a $1M home would face $24,700/year in NJ property taxes on a comparable home — more than offsetting most income tax savings. For renters at moderate incomes ($100,000–$300,000): NJ has slightly lower income tax rates and NYC access may offset the higher cost of living. For most people, moving from CA or NJ to a no-income-tax state (Texas, Florida, Nevada) is the more rational financial move.