June 28, 2025

NJ Settlement Costs to Change

By ann

This is a major change for buyers and sellers in New Jersey- particularly in the seashore market:

Update on the Realty Transfer Fee Fight
New Jersey REALTORS® is leading the fight to protect homeowners and the real estate market from proposed legislation that would have significantly increased taxes on real estate transactions. While we do not support any increase in taxes on real estate, the revised version of the law that will likely be passed is a vast improvement from the original proposal—thanks to the aggressive and strategic advocacy efforts led by our Government Affairs team.
Our Call for Action is still ongoing—please take action here if you have not yet.
What’s Changing
If passed, effective July 10, 2025, a new graduated tax on high-end property sales will go into effect. This tax, known as the “Supplemental Fee to the Realty Transfer Fee” is separate from the existing 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.
In the Last 48 Hours
Negotiations around this proposal vacillated wildly in the past 48 hours, with suggested tax rates climbing as high as 5%. NJ REALTORS® was fully engaged throughout this rapid and uncertain period, pushing back on excessive increases and advocating for a more measured, equitable structure that would not unfairly burden the existing market.
Our efforts directly helped shape a final version that, while still concerning, is far more reasonable than what was initially on the table.
Effective Timeline
The new rates will go into effect July 10, 2025 and will apply to all contracts executed on and after July 10, 2025.
If there is a fully executed contract in place before July 10, 2025 and the deed is recorded before Nov. 15, 2025, the state may issue a refund for the additional tax charged under the new law. This ensures fairness for deals that may be caught in transition.
A graduated structure lessens the blow for most transactions and narrows the impact.There is no rate increase between $1 million and $2 million—only a shift in responsibility from the buyer to seller.
Through our lobbying efforts, more than 98% of all real estate transactions in New Jersey are exempt from this new proposed law.
To be clear: We do not support any increase in real estate taxes and have actively rallied against the increase since the proposal was announced in the governor’s proposed budget in February. However, we are proud our advocacy delivered critical improvements to what was once a potentially devastating proposal.

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