New Jersey’s “Mansion Tax” Now Costs Sellers Up to 3.5%: What You Need to Know Before You Sell

If you’re selling a New Jersey home for more than $1 million, you now owe a Graduated Percent Fee of 1% to 3.5% of the sale price, on top of the standard Realty Transfer Fee, and as of July 2025 it’s the seller who pays it, not the buyer. This fee, still widely known as the “mansion tax,” was overhauled by New Jersey law in 2025 and remains fully in effect for every sale in 2026. Understanding it before you price your home can save you an unpleasant surprise at closing.

Table of Contents

1. What Actually Changed With New Jersey’s Mansion Tax?
2. What Are the New Graduated Rates?
3. What About the Standard Realty Transfer Fee?
4. Who Actually Pays This Now?
5. Are There Any Exemptions?
6. What Does This Mean for Your Net Proceeds?
7. FAQ

What Actually Changed With New Jersey’s Mansion Tax?

New Jersey has taxed high-value property sales since 2004, when a flat 1% fee kicked in on transfers over $1 million. According to the New Jersey Division of Taxation, that fee, now officially called the Graduated Percent Fee, was overhauled on June 30, 2025, when Governor Phil Murphy signed P.L. 2025, c. 69 into law as part of the state’s Fiscal Year 2026 budget. The changes took effect for deeds recorded on or after July 10, 2025, and remain in effect for every sale in 2026.

Two things changed. First, the fee is no longer a flat 1%, it now scales up based on the sale price. Second, and more importantly for sellers, the legal responsibility for paying it shifted from the buyer to the seller.

What Are the New Graduated Rates?

For deeds recorded on or after July 10, 2025, the New Jersey Division of Taxation applies the Graduated Percent Fee as follows:

• 1% of total consideration over $1,000,000 but not over $2,000,000
• 2% of total consideration over $2,000,000 but not over $2,500,000
• 2.5% of total consideration over $2,500,000 but not over $3,000,000
• 3% of total consideration over $3,000,000 but not over $3,500,000
• 3.5% of total consideration over $3,500,000

The fee applies to the entire sale price as a straight percentage, not just the amount above each threshold. On a $2.75 million sale, for example, the fee falls in the 2.5% bracket, which works out to $68,750 due at recording, according to the Division of Taxation’s own worked example.

What About the Standard Realty Transfer Fee?

The Graduated Percent Fee is separate from, and in addition to, New Jersey’s standard Realty Transfer Fee (RTF), which applies to every property sale in the state regardless of price. According to the NJ Division of Taxation’s official RTF rate schedule, a sale with $325,000 in consideration and no exemptions carries a standard RTF of $1,910.

In other words, every New Jersey seller pays the standard RTF, and sellers of homes over $1 million pay the Graduated Percent Fee on top of it.

Who Actually Pays This Now?

Before the 2025 reform, the 1% mansion tax was the buyer’s responsibility. That’s flipped. A New Jersey Division of Taxation policy memo dated July 9, 2025 states plainly that “for all deeds submitted for recording on or after July 10, the statutes put legal responsibility for payment of all transfer fees on the seller.”

This matters directly for anyone pricing a home sale in 2026: a fee that used to come out of the buyer’s pocket now comes out of the seller’s proceeds at closing.

Are There Any Exemptions?

Yes, several. According to the Division of Taxation, the Graduated Percent Fee does not apply if the property transfers to a purchaser that’s an IRS-recognized tax-exempt organization, or if the transfer otherwise meets one of New Jersey’s standard exempt-transaction categories, such as transfers between spouses, parent-to-child transfers, or a sale by an executor distributing an estate according to a will.

Sellers who believe an exemption applies still need to file the appropriate affidavit of consideration with the deed to document the claim.

What Does This Mean for Your Net Proceeds?

If you’re selling a New Jersey home above $1 million, this fee applies whether you sell through a traditional listing or a direct cash sale. It isn’t something a cash buyer can waive, since it’s a state-imposed fee owed at recording, not a negotiable closing cost. What a cash sale does change is your certainty about the rest of the transaction: no appraisal contingency, no risk of a financed buyer’s loan falling through, and a clear picture of your net number once the Graduated Percent Fee and standard RTF are accounted for.

For sellers below the $1 million threshold, the standard RTF still applies, but the Graduated Percent Fee simply isn’t a factor.

Selling a New Jersey Home and Want to Know Your Real Net Number?

Byrd and Co buys houses as-is across New Jersey and 11 other states. We’ll walk through exactly what New Jersey’s transfer fees mean for your specific sale before you commit to anything.

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Frequently Asked Questions About New Jersey’s Mansion Tax

Is New Jersey’s mansion tax still 1% flat in 2026? No. Since July 10, 2025, the fee is graduated, ranging from 1% on sales between $1 million and $2 million up to 3.5% on sales over $3.5 million.

Does the buyer or seller pay the mansion tax now? The seller. New Jersey shifted legal responsibility for the Graduated Percent Fee from buyer to seller for all deeds recorded on or after July 10, 2025.

Is the mansion tax the same as the Realty Transfer Fee? No. The standard Realty Transfer Fee applies to every New Jersey sale regardless of price. The Graduated Percent Fee is a separate, additional fee that only applies to sales over $1 million.

Can a cash sale help me avoid the mansion tax? No. It’s a state-imposed fee owed at recording regardless of how the buyer pays. A cash sale can still simplify the rest of the transaction, but it doesn’t change this fee.

Are any New Jersey sellers exempt from the fee? Yes. Transfers to IRS-recognized tax-exempt organizations, transfers between spouses or parent and child, and certain estate transfers by an executor can qualify for exemptions, provided the required affidavit is filed with the deed.