N.J. Stat. § 40A:21-6.1
A municipality may adopt an ordinance granting an abatement or exemption from taxation for improvements to a residential property resulting from a renovation housing project, as defined under subsection c. of section 14 of P.L. 1992, c.79 (C.40A:12A-14) (as amended by section 1 of P.L. 2007, c. 90). The ordinance shall require that, in determining the value of real property, the municipality shall regard up to and including the assessor's full and true value of the improvements as not increasing the taxable value of the property for a period of five years, notwithstanding that the market value of the property to which the improvements are made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment thereon immediately prior to the conflagration affecting the value of the property, unless there is damage to the structure through action of the elements sufficient to warrant a reduction. The ordinance may provide for a reduction of the abatement or exemption for each year of the exemption period.
N.J.S. § 40A:21-6.1