Summary of the Mansion Tax Changes

I participated in the New Jersey Association of Realtors briefing this morning to better understand the changes that will go into effect as of July 10, 2025.

Key points as of 7/1/25-

1) Realty transfer tax fees remain the same- no increase in the fee structure.  This tax continues to be a seller expense of approximately 1%, and is discounted for primary home owners over 62 years of age.

2) Mansion Tax (also called the supplemental tax) becomes a seller expense as of July 10, 2025.  No discounts for seniors or primary homes.

3) The mansion tax continues to apply to residential, multi-family and some commercial properties- no changes on qualifying properties.  Vacant land remains exempt.

4) As of July 10th, the Contract of Sale available in NJAR Forms will be updated with the new law.  There will also be an addendum available to address contracts already in place.

5) Buyers continue to pay the mansion tax on any settlement prior to July 10th.

6) Sellers will pay the mansion tax on any settlement from July 10th or later.

7) If there is a fully signed and binding sale contract (out of attorney review) as of July 9th, with settlement scheduled for after July 10th, but prior to November 15th, the seller may qualify for a rebate of the mansion tax paid in excess of the original 1%.

8) If the sale price is $1,000,001 to $2,000,000, the seller pays 1%, and does not qualify for a rebate.  If the sale price is $2,000,001, the seller pays 2% mansion tax and qualifies for a rebate of the extra 1%.  The rebate only applies to the mansion tax paid in excess of 1%, therefore, the max rebate for sales $3,500,001 and above will be 2.5%.  Sellers will apply for this rebate with the NJ Division of Taxation.  For all sale contracts signed on July 10th or later, there’s no rebate option.

9) Note that the mansion tax applies to sale prices OVER the stated amounts:

Over $1,000,000  = 1%

Over $2,000,000 but not greater than $2,500,000 = 2% 

Over $2,500,000 but not greater than $3,000,000 = 2.5%

Over $3,000,000 but not greater than $3,500,000 = 3%

All sales over $3,500,000 = 3.5%

I’m happy to answer questions to the best of my ability.