New Jersey Increases “Mansion Tax” as Part of 2026 State Budget

July 3, 2025

By Susan Heckman

On June 30, 2025, New Jersey lawmakers approved the state’s 2026 budget, which includes a significant revision to the Realty Transfer Fee—commonly known as the “Mansion Tax.” The updated legislation introduces a tiered supplemental fee on high-value real estate transactions and shifts the tax burden from buyers to sellers.

First enacted in 2004, the mansion tax imposed a 1% fee on the sale of properties priced over $1 million, typically paid by the buyer. At that time, the median home price in New Jersey was approximately $350,000. Today, that figure has climbed to around $550,000, and in many neighborhoods throughout the state, $1 million homes are increasingly common—without necessarily being luxury properties.

Under the new law, sellers will now shoulder the cost of this tax, with closing expenses starting at $10,000 and escalating significantly depending on the final sales price.

The new tax applies to single-family homes, condos and co-ops, 1-4 family properties, and some commercial properties as well.

Here’s the breakdown of the new tax on home sales over $1,000,000:

$1,000,000 - $1,999,999	The existing 1% “mansion tax” remains, but the responsibility shifts from the buyer to the seller, amending the 2004 law
$2,000,000 - $2,499,999	2.0% tax on the seller
$2,500,000 - $2,999,999	2.5% tax on the seller
$3,000,000 - $3,499,999	3.0% tax on the seller
$3,500,000 and above	3.5% tax on the seller

Key dates to note:

• Contracts fully executed on or after July 10, 2025: The 1% buyer-paid fee is eliminated. Instead, the seller will pay a new tiered supplemental fee based on the sale price.

• Contracts executed prior to July 10, 2025, with deeds recorded by November 15, 2025: Any supplemental fee paid in excess of 1% will be refunded to the seller.

Source: NJRealtor.com

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Wondering how much the realty transfer fee will be on a purchase? Click the RTF Calculator HERE

We are happy to discuss these tax changes and how they can affect your real estate transaction. Email us at info@thegallerynj.com schedule a consultation – and explore your options with a qualified and experienced local Broker.

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