We wanted to alert you to the significant changes to New Jersey’s “Mansion Tax” law that took effect on July 10, 2025. As detailed below, under the new law, the responsibility for paying this realty transfer fee shifts from buyers to sellers, and a new graduated rate structure will apply to properties that are subject to the fee. These updates may substantially impact real estate transactions, including increased rates for properties sold above $2 million.

Transactions Affected?

  • Transfers of New Jersey real property or controlling interests in entities owning real property that is classified as Class 2 (Residential), Class 3A (farm property regular), cooperative units and Class 4 (commercial property).
  • Applies when the total consideration exceeds $1 million.
  • Particularly affects transfers over $2 million, where the rate has increased.

New Tiered Fee: Over $1M to $2M
Fee Rate: 1.0% (unchanged)

New Tiered Fee: Over $2M to $2.5M
Fee Rate: 2.0%

New Tiered Fee: Over $2.5M to $3M
Fee Rate: 2.5%

New Tiered Fee: Over $3M to $3.5M
Fee Rate: 3.0%

New Tiered Fee: $3.5M
Fee Rate: 3.5%

Who pays the fee?

  • Previously, the buyer (grantee) paid all supplemental transfer fees, including the mansion tax.
  • Under P.L. 2025, c. 69 (effective July 10, 2025), the seller (grantor) becomes responsible for these fees.
  • If a fully executed contract is dated before July 10, 2025, and the deed (or controlling‑interest transfer) is recorded on or before November 15, 2025, the increased tiered rates will not apply, and the seller may be eligible for a refund if they already paid in excess of 1%.

If you have any business questions, please contact Angelo Bolcato, Practice Leader, at (973) 729-1880, or via email, [email protected].