New Jersey Mansion Tax Alert

Governor Phil Murphy has approved significant changes to New Jersey’s real estate transfer fee, controlling interest transfer tax, and mansion tax as part of the state’s new budget. These changes raise the tax rates on high-value real estate transactions and shift the payment responsibility from buyer to seller.

The updated law applies to transfers of residential, commercial, certain farm properties, and cooperative units sold for more than $2 million. It also applies to non-deed transfers of controlling interests in entities that directly or indirectly own commercial property, provided the value exceeds $1 million.

Under the new structure, the following tax rates will apply based on the sale price or consideration:

• 1% for transfers over $1 million but not more than $2 million

• 2% for transfers over $2 million but not more than $2.5 million

• 2.5% for transfers over $2.5 million but not more than $ million

• 3% for transfers over $3.5 million but not more than $ million

• 3.5% for transfers over $3.5 million

This is not just an increase in the cost of Mansion Tax but a shift in who pays. Previously, the buyer was responsible for paying these taxes. The amended legislation now places that responsibility on the seller for both the real estate transfer fee and the Mansion Tax.

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This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007