07/03/2025
To our clients:
We thought it important to notify you of changes in the new New Jersey state budget which were approved Monday night relating to the state fees collected at the time of sale. Please review the following and let me know if you have any questions. We always advise seeking out the guidance of an attorney or accountant relating to legal or financial concerns but offer the following to better educate our clients.
SUPPLEMENTAL FEE TO THE REALTY TRANSFER FEE UPDATE
The Realty Transfer Fee (RTF) is the amount all Sellers pay at closing regardless of sale price; it is not a flat percentage but is close to 1%. This has been in effect since 1968.
The Supplemental Fee (aka "The Mansion Tax") was subsequently created in 2004 for sales $1M and higher and charged an additional 1% fee paid by the Buyer at closing.
The new update is as follows:
For sales closing before July 10th, all current fees remain in place (i.e. Seller pays RTF, Buyers pays Supplemental Fee ("Mansion Tax") of 1% of purchase price if $1M or greater.
For contracts executed on July 10th or later, the Seller still pays the RTF and new rules apply regarding the Supplemental Fee:
Sales Price $1-2 million: The existing 1% “Mansion Tax” remains, but the responsibility shifts from the Buyer to the Seller, amending the 2004 law.
Sales Price $2 million+: 2% tax on the Seller
Sales Price $2.5 million+: 2.5% tax on the Seller.
Sales Price $3 million+: 3% tax on the Seller.
Sales Price $3.5 million+: 3.5% tax on the Seller.
If under contract before 7/10/25 and closing before 11/15/25, the Seller will pay both the RTF and the new Supplemental Fee but will be eligible for a refund of the Supplemental Fees in excess of 1%. (i.e. the Seller will be paying the 1% "Mansion Tax" but will be refunded any additional monies.)
If under contract before 7/10/25 and closing after 11/15/25, Seller will be responsible for all RTF and Supplemental Fees and will not be eligible for a refund.
If under contract after 7/10/25, Seller will be responsible for all RTF and Supplemental Fees and will not be eligible for any refund.
While senior discounts will remain in place for RTF, they will not apply to Supplemental Fees.
RTF and Supplemental Fees apply to residential, multi-family, and commercial sales (with some exceptions.)
As always, the information provided is not legal or financial advice and we always recommend our clients speak to a qualified attorney or accountant regarding such matters.
For greater clarity, I suggest you visit the NJ Realtors Calculator here for a clear breakdown of fees based on sale price, contract and closing date.
Please contact me if you have any questions.
