N.J. Court Rules in Favor of Housing Charities in Tax Dispute

The New Jersey Supreme Court ruled Wednesday that nonprofit groups that provide housing and other services to the mentally ill and disabled are not liable for property taxes on their residential facilities, The Star-Ledger of Newark reports.

Writing for the unanimous court, Justice Barry Albin said 14 properties run by Advance Housing should remain tax-exempt because they serve a “vital need that would otherwise by borne by the state at a much greater cost.” Advocacy groups praised the decision, saying it would encourage more community housing for the mentally ill in the state.

Nine communities in Bergen County, N.J., sued Advance in 2004, arguing that because residents are not required to participate in support and counseling services, its facilities are essentially subsidized housing, and thus taxable. The towns won in state Tax Court, but that ruling was overturned on appeal.