Legal Developers

Major Changes to New Jersey Mansion Tax and Realty Transfer Fees

On June 30, 2025, the New Jersey Legislature passed legislation (Assembly Bill A5804) that overhauls the state’s “mansion tax” and realty transfer fee system. Governor Phil Murphy signed the bill into law the same day. The new legislation shifts the responsibility for the mansion tax from the purchaser of residential or commercial real property to the seller and imposes a new tiered supplemental realty transfer fee structure, significantly increasing the total transaction costs for high-value real estate sales in the state.

The mansion tax was originally signed into law in 2004 and historically charged purchasers of commercial and residential property valued at $1 million or more a 1% supplemental realty transfer fee at closing.

Under the revised framework effective for transfers on or after July 10, 2025, sellers, not purchasers, will now be responsible for paying the supplemental realty transfer fee on certain residential and commercial properties valued over $1 million. In addition to shifting the payment responsibility to sellers, the legislation introduces a tiered supplemental realty transfer fee structure based on the property’s sale price, as follows:

• 1% fee for properties sold for between $1 million and $2 million;
• 2% fee for properties sold for between $2 million and $2.5 million;
• 2.5% fee for properties sold for between $2.5 million and $3 million;
• 3% fee for properties sold for between $3 million and $3.5 million; and
• 3.5% for properties sold for more than $3.5 million.

For guidance on how these changes may affect real estate transactions in light of the new fee structure, please contact one of our experienced attorneys. 

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.