On June 30, 2025, Governor Murphy signed bill S4666 / A5804 into law, making the seller the responsible party for paying the “Mansion Tax” (N.J.S.A. 46:15-7.2 et seq.), in addition to the Realty Transfer Fee (N.J.S.A. 46:15-5 et seq.). The new law also substantially increases the rates (of said Mansion Tax) on transfers for more than $2,000,000.00. These changes are effective as of July 10, 2025, and are as follows:
1. The new tiered system of “Mansion Tax” is based upon the amount of consideration recited in the deed and will be charged as follows:
a. 1% if the consideration is in excess of $1,000,000 but not in excess of
$2,000,000
b. 2% if the consideration is in excess of $2,000,000 but not in excess of
$2,500,000
c. 2.5% if the consideration is in excess of $2,500,000 but not in excess
of $3,000,000
d. 3% if the consideration is in excess of $3,000,000 but not in excess of
$3,500,000
e. 3.5% if the consideration is in excess of $3,500,000.
2. Deeds with consideration in excess of $2,000,000 will need to be recorded by the county no later than July 9, 2025, for the prior 1% “Mansion Tax” fee to be honored.
3. For deeds recorded beginning on July 10, 2025, and before November 15, 2025, the grantor may apply for a refund with the New Jersey Division of Taxation for the difference in the additional fee that was required by the county to record the deed. The grantor will only be eligible for the refund if the contract of sale for the property was fully executed by July 9, 2025, and the refund request is submitted within one year following the date of the recording of the deed.
Presumably, the Division of Taxation will aim to either eliminate (or replace) the Affidavit of Consideration for Use by Buyer (form RTF-1EE) or potentially revise the Affidavit of Consideration for Use by Seller (form RTF-1) before the July 10 implementation date. I suggest that you closely monitor the Division of Taxation’s website for new forms: https://www.nj.gov/treasury/taxation/realtytransfees.shtml.
Based on the current situation, it is more important than ever to be certain that deeds conveying property within these revised dollar amounts are recorded immediately upon closing as any delay could result in the recording being rejected and additional fees owed.
As we obtain further information, we will keep you updated.
Linda H. Schwager, Chair, Real Property Committee