Amendments to New Jersey “Mansion Tax” Real Estate Transfer Fee Law

Senate Bill No. 4666 has been signed into law and will take effect on July 10, 2025. The new law increases the taxes imposed on high-value real estate transactions and shifts the responsibility for paying these taxes from the buyer to the seller.

Under the previous law, buyers were responsible for paying an additional realty transfer fee on property transfers exceeding $1 million, as well as a controlling interest transfer tax on certain non-deed transfers of commercial property. Both taxes were generally calculated at one percent of the consideration paid. The new law increases these rates for transfers valued over $2 million. Specifically, the fee and tax will now be imposed at two percent for transfers over $2 million but not more than $2.5 million; two and one-half percent for transfers over $2.5 million but not more than $3 million; three percent for transfers over $3 million but not more than $3.5 million; and three and one-half percent for transfers over $3.5 million.

In addition to increasing the rates, the law shifts the obligation to pay both the additional fee and the controlling interest transfer tax from the buyer to the seller. The law also includes a limited provision: sellers may apply to the Director of the Division of Taxation for a refund of any amounts paid in excess of one percent of the consideration for property sold for more than $1 million, provided that the contract was fully executed before July 10, 2025 and the deed is recorded on or before November 15, 2025.

For questions about how these changes may affect your next real estate transaction, contact Rich Israel for guidance.

Richard Israel is a shareholder at Earp Cohn P.C. in Cherry Hill, NJ, where he represents businesses and business owners in various legal matters. With experience as in-house counsel for both privately held and publicly traded Fortune 500 companies, Rich helps clients identify, evaluate, and minimize risks in their business operations while achieving their ultimate business objectives. He also has significant experience advising clients on complex real estate transactions, including acquisitions, sales, leasing, and development projects.