Mansion tax' rates rise, and burden is now on the seller
By: Maddie McGay
NorthJersey.com
USA Today Network - New Jersey
..... Multi-million-dollar home sales in the Garden State will be subject to higher fees under the New Jersey mansion tax as part of a new measure that was passed in tandem with the state's $58.78 billion fiscal year 2026 budget.
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The mansion tax, formally referred to as the "Assessment on Real Property Greater than $1 million" or Additional Fess on certain Transfers of Real Property over $1 Million," was originally signed into law in 2004 by then Governor Jim McGreevey.
..... The tax has historically charged home-buyers - unless negotiated to be paid by the seller - of properties worth $1 million or more a 1% supplemental realty transfer fee at the time of closing.
..... Taking effect on July 10, [2025] this new law shifts the burden of the mansion tax, as well as the state's controlling interest transfer tax for commercial properties, from property buyers to sellers.
..... It also maintains the original 1% fee for home sellers worth $1 million to $2 million, but now also implements higher fees for increasingly expensive properties.
..... This starts with a 2% fee for home sales worth $2 million to $2.5 million and inverses by half a percentage point for every $500,000 more, topping out at 3.5% for property sales of more than $3.5 million.
..... This is compared with Governor Phil Murphy's original budget proposal from February 2025, in which he proposed a 2% fee for property sales between $1 million and $2 million and a 3% fee for properties sales over $2 million.
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These new fees apply to residential real estate, most commercial properties, certain farm properties and cooperative units, just as the mansion tax did in the past.
..... Exemptions for these fees can be found on the state Division of Taxation website.
..... Overall, the New Jersey mansion tax is expected to bring in more than 4550 million in revenue for the year, according to the state's budget for fiscal year 2026.