New Jersey's 2025 Mansion Tax Change: What Home Sellers Now Pay

Here is the short answer. If you sell a New Jersey home for more than $1 million, the property is in a covered class such as Class 2 residential, and the deed was submitted for recording on or after July 10, 2025, you, the seller, are now legally responsible for what used to be called New Jersey's "mansion tax." The Division of Taxation now calls it the Graduated Percent Fee. It runs from 1% to 3.5% of the entire sale price, and it is owed on top of the regular Realty Transfer Fee.

Below are the rates, the covered sales and the deadlines, all taken from the law itself and the State's own guidance.

What changed in the NJ mansion tax in 2025

The change came from P.L. 2025, c. 69 (Assembly Bill A5804), approved June 30, 2025, which applies to transfers on or after July 10, 2025. Per the Division of Taxation's July 2, 2025 memorandum, two things changed:

• Who pays. The old flat 1% fee on transfers over $1 million was legally imposed on the buyer (the grantee). The law now imposes it on the grantor, which means the seller.
• How much. The flat 1% became a Graduated Percent Fee, with higher rates at higher prices.

The Controlling Interest Transfer Tax, which applies to certain sales of controlling interests in entities that own Class 4A commercial property, now uses the same rates and is also imposed on the seller.

The new rates

According to the Division of Taxation's Realty Transfer Fee page, the rate is applied to total consideration:

The last column is simply the rate multiplied by the price.

One rate on the whole price

This surprises most sellers. The Division's July 2, 2025 memorandum calls the fee "a straight application of a percentage of total consideration," and the statute applies the rate to "the entire amount of consideration recited in the deed." It is not a marginal bracket: once your price lands in a band, that rate applies to every dollar.

The Division's own example is a $2.75 million deed transfer. It owes 2.5% × $2.75 million = $68,750 at recording, in addition to the seller's other fees.

That creates a jump at each threshold. At exactly $2,000,000 the fee is 1%, or $20,000. One dollar more puts the sale in the 2% band, roughly $40,000.

Which sales it applies to

The fee applies only when the consideration is "in excess of $1,000,000" and the property is listed in one of these classes on the municipal tax list (Division of Taxation general information):

• Class 2 residential property of one to four units
• Class 3A (regular) farm property, but only if it includes a building or structure intended or suited for residential use, plus any other property transferred to the same buyer along with it
• Class 4A commercial property, other than industrial or apartments. Commercial mixed-use buildings that also contain apartments or industrial units are classified 4A, because the Division treats 4A as the "catch-all" commercial class. If you believe a mixed-use property is mostly apartment or industrial use, the Division says you can file a refund claim and its staff will inspect the property.
• Cooperative units, which the Division lists as Class 4C

Your municipal assessor or the municipal tax list can confirm your class. Once the assessor has filed the tax list and the municipality's appeal deadline has passed, the assessor cannot change the class mid-year. In that case the seller pays the fee and can then file a refund claim, and Division staff inspect the property to decide whether a refund is due.

What counts as "consideration"

Consideration means the entire compensation paid or to be paid for the property, including the remaining amount of any prior mortgage the transfer is subject to or that is assumed, and any other lien or encumbrance not paid off in the transfer (Form RTF-1EE instructions). Form RTF-1EE must be attached to every deed for consideration over $1,000,000, and knowingly falsifying the consideration on a deed or its affidavit is a fourth-degree crime. In an example written under the old 1% fee, the Division's RTF FAQ treats spouses who buy one home through two separate $600,000 contracts and deeds as a single $1,200,000 purchase.

Exemptions in the law

The statute exempts transfers to buyers the IRS recognizes as 501(c)(3) organizations; transfers incidental to a corporate merger or acquisition when the property's equalized assessed value is less than 20% of all assets exchanged; and certain intercompany transfers between members of a combined group. These exemptions are claimed on Form RTF-1EE.

You still pay the base Realty Transfer Fee

The Graduated Percent Fee sits on top of the base Realty Transfer Fee (RTF) that sellers already paid to record a deed. In the words of the Division's Realty Transfer Fee page, "The seller is statutorily responsible for the RTF and the Graduated Percent Fee."

The base RTF is calculated differently. Each slice of the price is charged its own rate per $500, and there are separate rate schedules for total consideration of $350,000 or less and for anything above $350,000. For sales over $350,000, the rates start at $2.90 per $500 on the first $150,000 and reach $6.05 per $500 on the amount above $1,000,000 (RTF FAQ). Two official examples:

• A $325,000 sale with no exemptions, priced on the $350,000-or-less schedule, owes a base RTF of $1,910.00 (RTF FAQ).
• A $1,000,000 sale owes $9,575.00 with no exemption, or $4,675.00 with a partial exemption (official fee schedule).

A partial exemption from the base fee

A partial exemption reduces the base RTF for qualifying sellers who are 62 or older, blind or disabled, and for low- and moderate-income housing (RTF FAQ). In the FAQ's example, a qualifying senior selling for $280,000 owes $475.00. For the senior, blind or disabled exemption, the seller must own and occupy the home at the time of sale, be a New Jersey resident, and be selling a one- or two-family residence. Joint tenants must all qualify; for spouses or civil-union partners who hold the home as tenants by the entirety, only one needs to qualify. The claim is made on Form RTF-1, notarized and recorded with the deed. This partial exemption lowers the base RTF only; it is not one of the Graduated Percent Fee exemptions listed in the statute.

Timing, contracts and refunds

The date that set the rate during the changeover

For the switch to the new rates, the date that counts is when the deed is submitted to the county recording officer. Deeds received on or before July 9, 2025 kept the old flat 1% fee, no matter when they were actually recorded, and under the "mailbox rule" a properly addressed, postage-paid deed postmarked on or before July 9 was treated as received by that date (July 9, 2025 Division memorandum). The county recording officer collects the fee when the deed is offered for recording.

Who actually pays can be negotiated

The seller is legally responsible, but the Division says the parties "are able to apportion or shift the burden of payment in their contract negotiations" (Division general information). As long as the fee is paid, the State has no interest in who actually pays it; legal responsibility only decides who can file a refund claim and who would owe any underpayment found in an audit (July 9, 2025 memorandum). For questions about how the law affects your own contract, the Division directs taxpayers to private legal counsel.

Refund deadlines

A transition rule lets some sellers recover whatever they paid above 1%. Per the Division, all three conditions must apply: the price was over $2 million, the contract was fully executed before July 10, 2025, and the deed was recorded on or before November 15, 2025. The seller files Form RTF-3 with the Division within one year after the deed's recording date, along with a copy of the deed, a complete copy of the fully executed contract of sale and the fully executed settlement statement, which the Division's guidance calls the HUD-1 (Division memorandum). Because qualifying deeds had to be recorded by November 15, 2025, the last of these one-year windows closes in mid-November 2026, and windows for deeds recorded before late September 2025 have already closed.

Outside the transition rule, a Graduated Percent Fee refund claim must be filed under oath within 90 days after payment, and the Division says claims received after that 90-day period will not be approved. For the base RTF, a seller's refund claim can be filed within four years after payment (Form RTF-3 instructions).

Before you list: a short checklist

• Confirm your property class with the municipal assessor or on the tax list.
• Estimate the base RTF and, above $1 million, the Graduated Percent Fee.
• Review the contract's transfer-fee language with your attorney.
• Plan for Form RTF-1 if you may qualify for a partial exemption, and Form RTF-1EE if the price is over $1,000,000.

Our selling your home in Rahway and Union County keeps the Graduated Percent Fee rates in one place, and our step-by-step buying guide covers the other side of the table.

Selling in Rahway or elsewhere in Union or Middlesex County? I'm glad to walk you through what these fees mean for your sale, alongside your attorney, in English or Spanish. Contact Angela, or browse homes for sale in Union and Middlesex County.

Educational information only, not legal, tax or financial advice. Rules can change; confirm current requirements with the NJ Division of Taxation and your own attorney or tax professional. Figures reflect P.L. 2025, c. 69 and the Division's published guidance as reviewed in September 2026.

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