NJ Mansion Tax July 2025 Update

Effective July 10, 2025, New Jersey has enacted sweeping changes to its realty transfer tax regime for high-value property sales. For years, buyers of residential properties over $1 million paid a so-called "mansion tax" of 1 percent at closing. That structure is now gone. Going forward, it is the seller who will be responsible for paying this tax.

But the changes do not stop there. In addition to shifting the existing 1 percent tax to the seller, the new law imposes higher, graduated fees on sellers of properties over $2 million. These changes apply to both residential and certain commercial property sales.

Here’s the new seller-paid fee structure:

Sale Price	Seller Fee
$1,000,001 to $2,000,000	1.00%
$2,000,001 to $2,500,000	2.00%
$2,500,001 to $3,000,000	2.50%
$3,000,001 to $3,500,000	3.00%
$3,500,001 and above	3.50%

This new fee is in addition to the standard New Jersey Realty Transfer Fee (RTF), which remains unchanged and continues to apply to nearly all transfers.

What types of transactions are affected?

• Residential property sales over $1 million

• Commercial or mixed-use properties, depending on classification

• Some vacant land, depending on zoning and intended use

These fees apply regardless of whether the seller is an individual, a business, or an institutional investor.

Why this matters:

1. Sellers now carry the full tax burden: Buyers are no longer paying the 1 percent mansion tax. The full transfer-related tax obligation now falls on the seller.

2. Net proceeds will take a hit: A $3.6 million sale will cost the seller $126,000 in mansion tax alone, not including the standard RTF.

3. Planning is critical: Sellers of affected properties should model out net proceeds before going to contract. What used to be a manageable closing cost is now a significant line item.

4. Contract negotiations may shift: Price, tax allocation, and timing may need to be revisited in light of the new seller obligations.

Bottom line:

New Jersey’s revised mansion tax law marks a major shift in deal economics for higher-value properties. If you are advising a seller or structuring a deal over $1 million, especially above the $2 million threshold, the new fee must be factored into every stage of the transaction. There is no phased rollout. This applies to all closings on or after July 10.

Reach out if you are unsure how these changes might affect your deal or need help analyzing the impact on net proceeds.