New Jersey's Mansion Tax Is Now the Seller's
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
A great deal of New Jersey homebuying content still says the buyer pays a flat one percent. The State's own page says otherwise, and for a move-up seller the difference is real money.
What the State actually publishes
The New Jersey Division of Taxation describes a Graduated Percent Fee on certain transfers of real property over $1 million. As a supplemental fee to the Realty Transfer Fee, the State imposes it on the recording of the deed for the sale of real property when the consideration paid is more than $1,000,000, with percentage rates graduated based on total consideration.
And then the sentence that matters most: the seller is statutorily responsible for the RTF and the Graduated Percent Fee.
That is the current published position, on a page last updated 05/21/26 and read on September 24, 2026.
The framing it replaced
For years the standard description was a flat 1% "mansion tax" on residential property over $1,000,000, paid by the buyer at closing. That language survives in a great deal of New Jersey real estate writing, in buyer checklists, and in cost-to-close calculators.
Two things about it are now wrong. The rate is not flat, and the party responsible is not the buyer.
The brackets, and the cliff inside them
| Total consideration | Rate |
|---|---|
| over $1,000,000, not in excess of $2,000,000 | 1% |
| over $2,000,000, not in excess of $2,500,000 | 2% |
| over $2,500,000, not in excess of $3,000,000 | 2.5% |
| over $3,000,000, not in excess of $3,500,000 | 3% |
| over $3,500,000 | 3.5% |
Read the wording carefully, because it is a percentage of total consideration within each band rather than a marginal rate applied only to the excess. A sale at $2,000,000 sits in the 1% band. A sale at $2,000,001 sits in the 2% band, and the 2% applies to the whole consideration.
That produces a genuine cliff at each boundary. It is not our place to advise anyone how to price a house, and we do not. It is squarely our place to point out that a move-up seller's net proceeds, which is what repays a bridge loan or funds a recast, can shift by a large amount across a bracket line.
What it applies to
The additional fee applies to all deeds where the land conveyed is classified as Class 2 residential; Class 3A where the property is a farm, but only if the farmland contains a building or structure intended or suited for residential use; Class 4A commercial other than industrial or apartment; and Class 4C cooperative units.
New Jersey recognises certain exemptions. Information on those is on Form RTF-1EE, Affidavit of Consideration for Graduated Percent Fee, which must be annexed to every deed for consideration over $1,000,000 and with every commercial property transfer. Whether any exemption reaches your facts is a question for your closing attorney, not for us.
The lending consequence
Buy-before-you-sell structures are repaid from the departing home's net proceeds. Three of the four common exits depend on that number: paying off a bridge loan, paying off a second mortgage or equity line, and funding the principal reduction that makes a recast worthwhile.
So a New Jersey seller above $1,000,000 should model the overlap using net proceeds after the Realty Transfer Fee and the Graduated Percent Fee, not sale price. The arithmetic is on the net proceeds page, and the structures on the structures page.
If you are staying under a million on the sale, the Graduated Percent Fee does not reach you, though the Realty Transfer Fee still does on its own graduated schedule.
Frequently asked questions
Does the buyer or the seller pay New Jersey's mansion tax?
The seller. The New Jersey Division of Taxation states that the seller is statutorily responsible for the Realty Transfer Fee and the Graduated Percent Fee. Descriptions of a buyer-paid flat 1% fee are outdated.
What are the New Jersey Graduated Percent Fee rates?
1% of total consideration over $1,000,000 but not in excess of $2,000,000; 2% over $2,000,000 but not in excess of $2,500,000; 2.5% over $2,500,000 but not in excess of $3,000,000; 3% over $3,000,000 but not in excess of $3,500,000; and 3.5% over $3,500,000.
Is the Graduated Percent Fee charged only on the amount above $1 million?
No. The published rates are percentages of total consideration within each band, not marginal rates on the excess. That creates a step at each bracket boundary, which is worth modelling into net proceeds.
What property classes does the New Jersey Graduated Percent Fee cover?
Class 2 residential; Class 3A farm, but only where the farmland contains a building or structure intended or suited for residential use; Class 4A commercial other than industrial or apartment; and Class 4C cooperative units.
What form is required for a New Jersey sale over $1 million?
Form RTF-1EE, Affidavit of Consideration for Graduated Percent Fee. It must be annexed to every deed for consideration over $1,000,000 and with every commercial property transfer, and it also carries the information on available exemptions.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. New Jersey's Realty Transfer Fee and Graduated Percent Fee are administered by the New Jersey Division of Taxation and exemptions depend on your facts; your closing attorney, your CPA, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.