The FY 2026 New Jersey budget calls for increases to the Supplemental Fee to the Realty Transfer Fee.
Here’s the breakdown of the new tax, which would now be entirely paid by the seller, on amounts in excess of:
- $1 million+: The existing 1% “mansion tax” remains, but the responsibility shifts from the buyer to the seller, amending the 2004 law.
- $2 million+: 2% tax on the seller.
- $2.5 million+: 2.5% tax on the seller.
- $3 million+: 3% tax on the seller.
- $3.5 million and above+: 3.5% tax on the seller.
For all contracts fully executed on or after July 10, 2025, where the home has a sales price over $1 million, the 1% fee paid by the home buyer is eliminated. Instead, a supplemental fee is imposed on the seller, calculated as a tiered percentage based on the sales price.
For all contracts fully executed prior to July 10, 2025, where the deed is recorded on or before November 15, 2025, any supplemental fees paid in excess of 1% will be refunded to the seller.
Understanding Realty Transfer Fees
The Realty Transfer Fee (RTF) was established in New Jersey in 1968 to offset the costs of tracking real estate transactions. Upon the transfer of the deed to the buyers the seller pays the RTF, which is based on their property’s sales price. Payment of the RTF is a prerequisite for recording the deed. In addition to the RTF paid by sellers, a 1% fee is required to be paid by the buyer on all transactions over $1,000,000 in both commercial and residential property classes. However, beginning July 10, 2025, pursuant to N.J.S.A. 46:15-7.2, this 1% buyer fee is eliminated. Instead, a supplemental fee is imposed on the seller for transactions exceeding $1 million. This supplemental fee is calculated based on a tiered percentage structure, depending on the sales price, as outlined in the calculator above. The supplemental fee is separate from, and is assessed in addition to, the standard RTF. The RTF and the supplemental fee are usually collected at the real estate closing by the legal representatives or title insurance agents responsible for recording the deed at the county registry offices. The funds are then shared between the state and counties. The state portion of the revenue is allocated to neighborhood revitalization, shore protection, and the state’s general fund. The counties are responsible for disbursement of their portion of the revenue. Unlike the supplemental fee, certain transactions may be exempt from the RTF. By way of example, the RTF does not apply to sales for less than $100 or to transactions made between husbands and wives or parents and children. Senior Citizens, blind or disabled persons, and low-and moderate-income housing may qualify for a partial exemption from the RTF. An Affidavit of Consideration must be filed with any deed in which a full or partial exemption is claimed from the RTF. More information on the RTF and the supplement fee is available from the New Jersey Department of the Treasury or by calling (609) 292-7974.
Curious about how YOU may be directly affected by this new law? Explore the Realty Transfer Fee Calculator provided by the New Jersey Association of Realtors.