July 10, 2025
A major revision to New Jersey's "mansion tax" took effect on July 10, 2025, shifting the payment responsibility from the buyer to the seller and introducing a new tiered, progressive rate system for high-value properties. This fee is a supplemental tax on top of the standard New Jersey Realty Transfer Fee (RTF).
New payment responsibility
Old rule: The 1% mansion tax on properties over $1 million was paid by the buyer.
New rule: The seller is now responsible for paying the tiered "graduated percent fee" at closing for property sales over $1 million.
New tax rate structure
The previous flat 1% rate for properties over $1 million has been replaced with a tiered system for sales over $2 million, with rates ranging from 1% to 3.5% depending on the sale price. The specific tiers can be found on the New Jersey Realtors site.
What this means for sellers
Sellers of homes over $1 million will likely face higher closing costs and may adjust pricing strategies. Sellers with contracts signed before July 10, 2025, but recorded by November 15, 2025, might qualify for a refund of tax paid above the old 1% rate.
Covered properties and exemptions
The graduated percent fee applies to residential, certain commercial and farm properties, and cooperative units. Exemptions include vacant land, industrial properties, certain apartment buildings and agricultural properties, and properties owned by government entities or non-profits.