Guide · New Jersey
New Jersey replaced the mansion tax. The seller pays now.
On 10 July 2025 New Jersey repealed the flat 1 percent mansion tax and replaced it with a graduated Percent Fee running from 1 percent to 3.5 percent. The fee is calculated on the full consideration, not as a bracket, and liability moved from the buyer to the seller. If your seller net sheet above $1 million still shows a 1 percent buyer-paid mansion tax, it is wrong.
What actually changed
P.L. 2025 c. 69 was enacted 30 June 2025 and took effect 10 July 2025. It did two things at once, and the second is the one that costs people money.
- The rate stopped being flat. The old mansion tax was a single 1 percent charge on consideration over $1 million. The replacement is graduated across five tiers, topping out at 3.5 percent.
- The liability moved. The old tax fell on the grantee, the buyer. The Percent Fee falls on the grantor, the seller. Same transaction, different party writing the cheque.
The New Jersey Division of Taxation issued a memorandum to county clerks and recording officers dated 2 July 2025 setting out the mechanics. It applies to deeds submitted to the county recording officer on or after 10 July 2025, so the controlling date is the recording date, not the contract date.
The rate schedule
| Total consideration | Rate |
|---|---|
| Over $1,000,000 up to $2,000,000 | 1% |
| Over $2,000,000 up to $2,500,000 | 2% |
| Over $2,500,000 up to $3,000,000 | 2.5% |
| Over $3,000,000 up to $3,500,000 | 3% |
| Over $3,500,000 | 3.5% |
Read that table carefully, because the most common mistake is treating it as a marginal bracket. It is not. The applicable rate is applied to the entire consideration.
A worked example, using Treasury’s own numbers
Take a $2.75 million transfer. The consideration falls in the tier over $2.5 million and up to $3 million, so the rate is 2.5 percent. That 2.5 percent applies to the whole $2.75 million:
2.5% × $2,750,000 = $68,750, due at recording, payable by the seller, on top of the Realty Transfer Fee.
If you treated it as a bracket and taxed only the $250,000 above the $2.5 million threshold, you would have quoted $6,250. That is a $62,500 error on a single line of a net sheet.
Which properties it reaches
The Percent Fee applies to Class 2 residential, Class 3A farm property that includes a residence, Class 4A commercial that is neither industrial nor apartment, and Class 4C cooperative units. It is not limited to houses, which catches people out on mixed-use and small commercial deals.
This is separate from the Realty Transfer Fee
New Jersey has two seller-side charges on a deed, and above $1 million the seller pays both. The Realty Transfer Fee is graduated per $500 of consideration and reaches $6.05 per $500 on amounts over $1 million. The Percent Fee sits on top of it. Quoting one and forgetting the other understates the seller’s costs materially.
The transitional refund window has closed
The statute included a transitional provision for deals caught mid-flight: on transfers over $2 million where the contract was fully executed before 10 July 2025 and the deed was recorded on or before 15 November 2025, the seller could claim back anything paid above 1 percent using Form RTF-3, within one year of recording. That window is now closed for practical purposes, but it is worth knowing if you are reconstructing a 2025 file.
What this means on a live file
Three practical consequences, in the order they bite:
- Net sheets above $1 million need rebuilding. Any template carrying a buyer-paid 1 percent mansion tax line produces a wrong number for both sides.
- The negotiation changed. Buyers used to absorb this. Sellers now do, which alters what a seller will accept at the $1 million, $2.5 million, and $3.5 million thresholds. Consideration just above a tier boundary is worth modelling before you advise on a counter.
- The recording date controls. A deal that drags past a recording target does not change tiers, but a deal structured around the effective date needs the recording date watched, not just the closing date.
This is the kind of detail we track on every New Jersey file. See our New Jersey transaction coordination page for the rest of it, including how attorney review actually runs and where the smoke and carbon monoxide certificate goes wrong.
Sources
Every figure on this page comes from the State of New Jersey. Fees and statutes change; confirm before relying on any number for a live file.
Keep reading
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FAQ
Quick answers.
Does New Jersey still have a mansion tax?
Not in its previous form. Effective 10 July 2025, P.L. 2025 c. 69 repealed the flat 1 percent buyer-paid mansion tax and replaced it with a graduated Percent Fee that the seller pays. The rate runs from 1 percent on consideration over $1 million to 3.5 percent on consideration over $3.5 million.
Who pays the new graduated Percent Fee in New Jersey?
The grantor, meaning the seller. This is the single most important change. Under the old mansion tax the grantee, the buyer, paid the 1 percent. P.L. 2025 c. 69 moved the liability to the seller, so a seller net sheet built on a pre-July-2025 template will understate the seller's costs on any sale above $1 million.
Is the New Jersey Percent Fee a bracket or a flat percentage?
It is a straight percentage of the total consideration, not a marginal bracket. The Division of Taxation's own worked example is a $2.75 million transfer: the 2.5 percent tier applies to the entire $2.75 million, producing $68,750 due at recording. Treating it as a bracket, and taxing only the amount above $2.5 million, understates the fee badly.
What property types does the Percent Fee apply to?
Class 2 residential, Class 3A farm property that includes a residence, Class 4A commercial that is neither industrial nor apartment, and Class 4C cooperative units. It applies to deeds submitted to the county recording officer on or after 10 July 2025, so the recording date controls, not the contract date.
Is the Percent Fee the same as the Realty Transfer Fee?
No, they are separate and both fall on the seller. The Realty Transfer Fee is a graduated per-$500 charge that applies to essentially every deed, topping out at $6.05 per $500 on consideration over $1 million. The Percent Fee is an additional charge that only applies above $1 million. On a high-value New Jersey sale the seller pays both.
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