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Key Points
- Under a new bill, the rates for New Jersey's mansion tax have increased from the original 1% for property sales of $1 million or more.
- The bill also shifts the responsibility of the mansion tax from property buyers to property sellers.
Multimillion-dollar home sales in the Garden State will be subject to higher fees under the New Jersey mansion tax as part of a new bill that was passed in tandem with the state's $58.78 million fiscal year 2026 budget.
The mansion tax, formally referred to as the "Assessment on Real Property Greater than $1 million" or "Additional Fees on Certain Transfers of Real Property Over $1 Million," was originally signed into law in 2004 by then-Gov. Jim McGreevey.
The tax has historically charged homebuyers — 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 1, this new bill 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 sales 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 increases 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 Gov. 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.
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 $550 million in revenue for the year, according to the state's budget for fiscal year 2026. This revenue is typically distributed to the New Jersey Affordable Housing Trust Fund, the Shore Protection Fund, the Highlands Protection Fund and the New Jersey General Fund.
Maddie McGay is the real estate reporter for NorthJersey.com and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@gannett.com.
Source: northjersey.com
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