Why High-Income New Yorkers Are Moving to New Jersey — and Saving Big
For many high-earning New Yorkers, the view of Manhattan from across the Hudson now represents something more than skyline envy — it’s a financial opportunity. With the incoming New York City mayor-elect proposing higher taxes on the city’s wealthiest residents, relocating from NYC to New Jersey is emerging as both a smart wealth-management strategy and a lifestyle upgrade.
The Financial Case: Tax Savings Across the Board
New York City residents face some of the nation’s highest combined income taxes — up to 14.8% for top earners once state and city taxes are factored in. The mayor-elect’s new plan would add a 2% surcharge on incomes above $1 million, pushing that combined rate close to 17% for many professionals and business owners.
In contrast, New Jersey’s top marginal income tax rate caps at 10.75% — and the state levies no city tax at all. That difference alone can translate into tens of thousands of dollars in annual savings. A Manhattan resident earning $1 million could save roughly $30,000 a year by establishing primary residency in New Jersey. For those earning $5 million or more, the savings climb into six figures.
New Jersey also maintains a lower sales tax — 6.625% versus NYC’s 8.875% — and eliminates tax on clothing, groceries, and prescription drugs. For luxury buyers furnishing a new home, even everyday purchases add up to meaningful savings.
Property taxes are higher in New Jersey (averaging around 2% compared to NYC’s sub-1%), yet lower home prices often offset the difference. A $975,000 home in Montclair, for example, might have a similar annual property-tax bill as a $1.8 million brownstone in Brooklyn — but with double the square footage, a yard, and garage parking.
The Lifestyle Case: Space, Style, and Smart Living
Financial logic aside, the move west of the Hudson offers something Manhattan rarely can: space, design flexibility, and balance.
Hoboken delivers a Manhattan-style lifestyle without the NYC tax bill. Walkable blocks, skyline views, and a 12-minute PATH train ride to Midtown make it perfect for professionals who crave energy and convenience.
Jersey City has evolved into a luxury hub with high-rise condos, brownstone neighborhoods, and top-tier dining. Many downtown residents reach Wall Street faster than Brooklyn commuters.
Montclair blends sophistication with suburban charm — historic homes, a thriving arts scene, and top-rated schools. The average home price sits around $975,000, attracting design-minded buyers who want architectural character and culture, not cookie-cutter suburbia.
Each town offers proximity to Manhattan paired with New Jersey’s stronger value proposition: more home, lower taxes, and a richer quality of life.
Planning Your Move Strategically
If your job remains NYC-based but your residency shifts to NJ, you’ll navigate two tax returns:
A New York nonresident return for NYC/NY-sourced income.
A New Jersey resident return for all income, with a credit given for NY taxes paid.
As a resident of NJ, you pay no NYC city income tax—only NY State tax on NY-source income and NJ tax on your total income (with the NY credit). This structure enables high earners to sidestep NYC’s city tax entirely.
To protect your tax savings:
Establish bona-fide NJ residency (driver’s license, voter registration, primary home).
Spend fewer than 183 days in NYC and limit NYC real estate ties, to avoid being treated as a resident for tax purposes.
Why Now
With Mamdani’s millionaire surcharge looming, the financial incentive to relocate from NYC to NJ has never been greater. For a $1 million earner, the annual tax savings could reach tens of thousands of dollars. For those earning $5 million–$25 million+, savings can soar into the hundreds of thousands or even millions annually. The move is no longer simply optional—it’s financially strategic.
Boutique Service. Expert Results.
Relocating across the Hudson isn’t just about taxes—it’s about life re-imagined, blending wealth-management and design-savvy real-estate strategy. We specialize in guiding high-net-worth clients through precisely this transition—from New York’s tax landscape to New Jersey’s luxury homes and smarter value.
Ready to explore the advantages of moving from New York City to New Jersey?
Contact Joelle Chilazi at Compass NJ— your boutique real estate experts and top rated realtor in Jersey City and Hoboken bridging the New York–New Jersey corridor.
