By Reshmee Jugmohun, REALTOR®, Licensed Real Estate Salesperson in New Jersey, Prominent Properties Sotheby's International Realty. Published November 2, 2026.

The New Jersey "mansion tax" is now paid by the seller. Since July 10, 2025, a home sold in New Jersey for more than $1,000,000 carries a Graduated Percent Fee of 1% to 3.5% of the entire sale price, legally imposed on the seller and collected when the deed is recorded. Because the rate applies to the whole price rather than only the part above each threshold, a sale just over $1,000,000, $2,000,000, $2,500,000, $3,000,000 or $3,500,000 can leave the seller with less money than a sale just under it.

This guide explains what changed, who pays, how much the fee is at common price points, why the thresholds matter when you set a list price, what else the state charges a seller when the deed is recorded, and what to settle before listing a home above $1 million. The rules come from P.L.2025, c.69, the New Jersey Division of Taxation's notices of July 2 and July 9, 2025, and the Division's realty transfer fee page as updated September 28, 2026.

One note before the detail. I hold an LLB and I do not practice law, and I am not an accountant or tax advisor. This guide explains how the fee works so you can plan and ask the right questions. Your real estate attorney prepares the settlement statement and advises on the contract.

What is the New Jersey mansion tax now?

It is a state fee on the sale of property for more than $1,000,000, officially called the Graduated Percent Fee, and since July 10, 2025 it is imposed on the seller at rates that rise with the price. "Mansion tax" was the popular name for the fee that existed before, and the name has stuck to its replacement.

The old fee was a flat 1% paid by the buyer. Before the change, New Jersey charged buyers 1% on residential purchases above $1,000,000, under a fee first enacted in P.L.2004, c.66. P.L.2025, c.69, approved on June 30, 2025, replaced it. The Division of Taxation's notice of July 2, 2025 describes the change in two sentences: the 1% fee on transfers over $1 million "now is a Graduated Percent Fee with graduated percentage rates based on consideration," and "it is legally imposed on the grantor instead of the grantee." The grantor is the seller; the grantee is the buyer.

The new law applies to transfers on or after July 10, 2025. The Division's memo of July 9, 2025 explains that the date that matters is the date the deed is submitted to the county for recording, because the statute says the fee is collected by the county recording officer at the time the deed is offered for recording. Any sale closing now falls under the new rules.

It sits on top of the realty transfer fee every seller already paid. New Jersey has long charged sellers a realty transfer fee on the recording of a deed. The Graduated Percent Fee is a supplemental fee that applies only above $1,000,000, so a seller in that range pays both. The two are calculated differently, as the sections below show.

Who pays it, the seller or the buyer?

The seller is legally responsible for it. The statute imposes the fee "upon the grantor of a deed," and the Division's realty transfer fee page states that the seller is statutorily responsible for both the realty transfer fee and the Graduated Percent Fee.

The contract can still move the cost. The Division's July 9 memo says the statutes put legal responsibility for all transfer fees on the seller, and that any contract provisions allocating responsibility otherwise are private legal arrangements. A footnote in the same memo adds that so long as the fee is paid, the State has no interest in the identity of the actual payor. In other words, buyer and seller can negotiate who bears the cost, and the Division's guidance on exemptions confirms that parties are able to apportion or shift the burden of payment in their contract negotiations.

Legal responsibility still matters in two situations. The same footnote explains that the legal liability decides who has the right to file a claim for a refund, and who would be liable if an audit discovers an underpayment. Even where a buyer agrees to cover the fee, the seller remains the party the state looks to. That is a point to cover with your attorney if a buyer proposes to pay it.

Older sources still say the buyer pays. Much of what is written about the mansion tax, including some pages that have not been revised, describes the pre-2025 rule. If a source tells you the buyer pays 1%, check its date. For deeds submitted on or after July 10, 2025, it no longer describes the law.

How much is it?

The fee is a single percentage of the entire sale price, set by the bracket the price falls into. P.L.2025, c.69 sets the percentages as follows, applied to the entire amount of consideration recited in the deed:

  • More than $1,000,000 and up to $2,000,000: 1%
  • More than $2,000,000 and up to $2,500,000: 2%
  • More than $2,500,000 and up to $3,000,000: 2.5%
  • More than $3,000,000 and up to $3,500,000: 3%
  • More than $3,500,000: 3.5%

It is not a marginal rate. Income tax brackets apply each rate only to the slice of income inside that bracket. This fee does not work that way. The Division's July 2 notice calls it "a straight application of a percentage of total consideration" and gives its own example: a deed transfer for $2.75 million is subject to a fee of 2.5% of $2.75 million, which is $68,750, due at recording in addition to the seller's other fees.

Here is what the fee comes to at a few price points, calculated from the statutory percentages:

  • A sale at $1,000,000: no Graduated Percent Fee, because the fee starts only above $1,000,000.
  • A sale at $1,200,000: 1%, or $12,000.
  • A sale at $2,000,000: 1%, or $20,000.
  • A sale at $2,750,000: 2.5%, or $68,750, the Division's own example.
  • A sale at $3,600,000: 3.5%, or $126,000.

"Consideration" means the full price, not the equity. The Division's affidavit forms define consideration as the entire compensation paid for the transfer, including the remaining amount of any prior mortgage the buyer takes over. Your mortgage balance does not reduce the figure the fee is calculated on.

Why do the price thresholds matter when you set a list price?

Because the percentage jumps at each threshold and applies to the whole price, a slightly higher sale price can produce a noticeably smaller amount for the seller. This is the part of the new law most worth understanding before you price a home in this range.

The jump at $2,000,000 shows it most clearly. At exactly $2,000,000 the fee is 1%, or $20,000. One dollar more, at $2,000,001, moves the whole price into the 2% bracket, and the fee becomes $40,000.02. The extra dollar of price adds $20,000 of fee.

Each threshold has a band above it where the seller nets less. Considering the Graduated Percent Fee alone, a sale has to clear the following prices before the seller keeps more than they would at the threshold itself:

  • Above $1,000,000: about $1,010,101
  • Above $2,000,000: about $2,020,408
  • Above $2,500,000: about $2,512,821
  • Above $3,000,000: about $3,015,464
  • Above $3,500,000: about $3,518,135

These figures are simple arithmetic on the statutory rates. They leave out the realty transfer fee, which also rises slightly with price and widens each band a little further.

What this means for a listing. If your home's likely sale price sits near one of these thresholds, the list price and the negotiation strategy deserve a closer look. An offer that lands just above a threshold may net you less than one just below it, and a counteroffer can be framed with that in mind. A buyer may also be willing to bear some or all of the fee as part of the negotiation, since the Division allows the parties to shift the burden by contract. These are pricing and negotiation decisions, made with the full settlement figures in front of you.

The price on the deed must be the real price. The fee is calculated on the consideration actually paid, and the seller signs an affidavit of consideration with the deed. Planning around the thresholds means pricing and negotiating well, never misstating the price.

What else does a seller pay to the state when the deed is recorded?

The realty transfer fee, which every seller pays regardless of price, unless an exemption applies. Unlike the Graduated Percent Fee, it is calculated in bands, so each rate applies only to the part of the price within its band.

The standard schedule for sales above $350,000, as published on the Division's realty transfer fee page, charges the following per $500 of consideration in each band: $2.90 up to $150,000; $4.25 from $150,000 to $200,000; $4.80 from $200,000 to $550,000; $5.30 from $550,000 to $850,000; $5.80 from $850,000 to $1,000,000; and $6.05 above $1,000,000.

On a $1,200,000 sale, that schedule works out to $11,995, by my calculation from the published table, and the Graduated Percent Fee adds $12,000, for about $23,995 in state fees at recording. On a $2,750,000 sale, the same schedule gives $30,750 before the $68,750 Graduated Percent Fee. Your attorney's settlement statement is the figure that governs; these are illustrations of how the two charges combine.

Some sellers qualify for a lower realty transfer fee. The Division publishes a reduced schedule for senior citizens, blind or disabled persons, and low and moderate income housing. For the senior reduction, the Division's Form RTF-1 requires that the seller be 62 or older, that the property be a one or two-family home owned and occupied by the seller at the time of sale, and that the seller be a New Jersey resident. A seller claiming it files Form RTF-1 with the deed. The reduced schedule applies to the realty transfer fee; ask your attorney how it interacts with the Graduated Percent Fee on your sale.

If you are leaving New Jersey, there is a separate charge to plan for. A seller who is not a New Jersey resident at closing may also have to make an estimated income tax payment when the deed is recorded, unless an exemption applies. It works differently from these fees, because the excess comes back on a return. My guide to the New Jersey "exit tax" explains it.

Which properties does the fee apply to?

Mainly homes. The statute applies the fee to transfers of property classified as Class 2 residential, to farm property only where it includes a building intended or suited for residential use, to cooperative units, and to Class 4A commercial property. The Division's exemptions guidance describes Class 2 as residential property of one to four units.

A Bergen County house sold above $1,000,000 to a private buyer falls within it. A single-family home, or a two to four-family building classified as residential, is squarely within the statute. Commercial sellers have a parallel change: the Division's page on the Controlling Interest Transfer Tax, updated August 26, 2026, explains that the tax on transfers of controlling interests in commercial entities now uses the same graduated rates and is now imposed on the seller instead of the purchaser.

The exemptions are narrow. The statute exempts a few specific situations, which are covered in the questions below. For an ordinary sale of a home to a private buyer, none of them applies, and the fee is due whenever the price exceeds $1,000,000.

How is the fee collected at closing, and what if it is calculated wrong?

It is collected by the county recording officer when the deed is recorded, and it appears on your settlement statement with the realty transfer fee. Your attorney or the title company handles the payment as part of recording.

A specific affidavit goes with the deed. The Division's realty transfer fee page says Form RTF-1EE, the Affidavit of Consideration for Graduated Percent Fee, must be annexed to every deed for consideration over $1,000,000 and with every commercial property transfer. The current revision is dated August 7, 2025, after the law changed. The seller's section of the form states that the grantor is required to remit the Graduated Percent Fee.

Refund claims have a short deadline. The statute allows a claim for a refund within 90 days after payment, and Form RTF-1EE warns that claims received beyond the 90 days will not be approved. If you believe the fee was calculated on the wrong figure or applied where an exemption should have applied, raise it with your attorney immediately after closing rather than at tax time.

What should you settle before you list a home above $1 million?

Settle the price range, the net figure and the negotiating position before the first showing. Each step below is easier now than once an offer is on the table.

Get a realistic price range first. The fee depends entirely on where your sale price lands relative to the thresholds, so the first question is whether your home's likely range straddles one of them. The method I use, a comparative market analysis built on recent sold comparables, is explained in my guide to what your home is worth before you list. Current listings across the county, useful for seeing how homes near your price are positioned, are on the Bergen County homes for sale page.

Ask your attorney for a net sheet at two or three prices. Seeing the realty transfer fee, the Graduated Percent Fee and your other closing costs at a price just below a threshold, at the threshold, and just above it shows you the real effect in dollars. That is the comparison that should shape your list price and your response to offers.

Decide in advance how you will treat the fee in negotiation. Because the Division allows the parties to shift the burden by contract, the fee can become part of the negotiation alongside price, timing and contingencies. Decide before an offer arrives whether you would accept a lower price with the buyer covering the fee, or prefer the reverse, and remember that the legal liability stays with you.

If you are also buying, plan the two transactions together. How lenders treat the house you still own, and the order of the two transactions, is explained in my guide to buying first or selling first. More on how I approach listings is on the selling page.

If you are planning to sell a home in Bergen County above $1 million and want a comparative market analysis that shows where your likely price falls against these thresholds, I am reachable through rjc.realestate.

Frequently Asked Questions

Does the fee apply to a sale at exactly $1,000,000?
No. The statute's first bracket applies to consideration "in excess of $1,000,000," so a sale at exactly $1,000,000 carries no Graduated Percent Fee. The same wording applies at every threshold: a sale at exactly $2,000,000 stays in the 1% bracket, and the 2% rate starts only above that figure. The realty transfer fee still applies at any price unless an exemption covers the sale.

My contract was signed before July 10, 2025. Did the old rules apply?
There was a transition rule, and it has now closed. Under P.L.2025, c.69, where a contract was fully executed before July 10, 2025 and the deed was recorded on or before November 15, 2025, any fee above 1% could be refunded to the seller on a claim filed within one year of recording. The Division's July 9, 2025 memo added that deeds received by the county on or before July 9, 2025 had the old 1% fee applied. For a sale recorded after November 15, 2025, the new rates apply in full.

Is there an exemption if I sell to a nonprofit?
Yes, in one specific case. The statute exempts transfers where the buyer is an organization exempt under Section 501(c)(3) of the Internal Revenue Code, and the Division's exemptions guidance states that any seller of any property class is not liable for the Graduated Percent Fee when the purchaser is a 501(c)(3) nonprofit. The statute's other exemptions concern corporate mergers and transfers between members of a combined group of companies, which do not arise in an ordinary home sale.

Does the fee apply to the sale of a co-op apartment?
Yes. The statute lists cooperative units among the transfers subject to the fee, and the Division's realty transfer fee page names Class 4C cooperative units in its list of covered classes. A co-op sold for more than $1,000,000 is therefore subject to the same graduated percentages as a house.

What about selling a farm with a house on it?
The fee applies to Class 3A farm property only where the property includes a building or structure intended or suited for residential use, according to the statute. The Division's exemptions guidance describes the covered category as farm property other than land actively devoted to agricultural or horticultural use, where it contains such a building. A farm sale above $1,000,000 that includes a residence should be reviewed with your attorney to confirm how the property is classified.

Do transfers between spouses or to a child pay the realty transfer fee?
The Division's realty transfer fee page lists exemptions from the realty transfer fee that include transfers between husband and wife or parent and child, and deeds recorded within 90 days following a divorce decree. A seller claiming one of these exemptions files Form RTF-1 with the deed. Whether the Graduated Percent Fee also applies in a given family transfer depends on the consideration and the facts, and is a question for your attorney.

Can a sale be split into two deeds to stay under a threshold?
No. The Division's guidance on transfer fees addresses separate contracts and deeds for what is effectively one transfer and states that the total consideration is the combined consideration of each deed together. The fee is calculated on the full amount, so dividing a sale does not change the bracket, and the price recited must be the real consideration.

Where can I see the official rates and forms?
The Division of Taxation publishes the realty transfer fee schedules and the Graduated Percent Fee rates on its realty transfer fee page, together with links to Form RTF-1EE, the Affidavit of Consideration for Graduated Percent Fee, and Form RTF-1, the seller's affidavit used when claiming an exemption from the realty transfer fee. The current revision of Form RTF-1EE is dated August 7, 2025, after the law changed, so check that any copy you are given carries that date.

Do I pay a mansion tax when I buy my next home in New Jersey?
Not under the current law. P.L.2025, c.69 imposes the Graduated Percent Fee on the grantor, the seller, for transfers on or after July 10, 2025, and the Division's July 2, 2025 notice confirms it is now imposed on the grantor instead of the grantee. A buyer and seller can still agree in the contract that the buyer will bear some or all of it. If you are selling one home and buying another, the order of the two transactions is covered in my guide to buying first or selling first.

How can I tell whether my home's price will land near a threshold?
A comparative market analysis estimates a likely sale range from recent sales of comparable homes near yours, adjusted for size, condition and features, and that range shows whether you are close to $1,000,000, $2,000,000 or one of the higher thresholds. Knowing that before you list is what lets you set a price and a negotiating position with the fee in view. If you would like one on your own home, I am reachable through rjc.realestate.