New Jersey’s “mansion tax” is now officially called the Graduated Percent Fee. Since July 10, 2025, it has been legally imposed on the seller instead of the buyer. It applies to sales over $1 million, at rates from 1% to 3.5% of the total price.
Key takeaways
- The seller is now legally responsible for the NJ mansion tax.
- Rates run from 1% to 3.5% of the full sale price on sales over $1 million.
- The fee is paid to the county when the deed is submitted for recording, along with the regular transfer fee.
- A $100 price change near $2 million can move the fee by more than $20,000. The math is below.
What is the NJ mansion tax?
Before July 2025, New Jersey charged a flat 1% fee on transfers over $1 million. The buyer (the “grantee”) paid it, and people called it the mansion tax.
On June 30, 2025, New Jersey enacted P.L. 2025, c. 69, which took effect July 10, 2025. According to the Division of Taxation’s notice, the law turned the old 1% fee into a Graduated Percent Fee and placed it on the grantor, which is the seller.
The Graduated Percent Fee is a supplemental fee on top of the Realty Transfer Fee (RTF). The seller is statutorily responsible for both. The two fees are paid to the county recording officer when the deed is submitted for recording. The Division of Taxation does not collect them separately.
This article covers the mansion tax only. For the full list of seller and buyer costs at closing, see our guide to closing costs in NJ.
NJ Graduated Percent Fee rates
The rate depends on the total consideration (the sale price). Here is the official schedule. Sales at $1,000,000 or less fall below the first band.
| Sale price (total consideration) | Rate | Example fee |
|---|---|---|
| Over $1,000,000 up to $2,000,000 | 1% | $15,000 on a hypothetical $1,500,000 sale |
| Over $2,000,000 up to $2,500,000 | 2% | $40,002 on a hypothetical $2,000,100 sale |
| Over $2,500,000 up to $3,000,000 | 2.5% | $68,750 on a $2,750,000 sale (the Division’s own example) |
| Over $3,000,000 up to $3,500,000 | 3% | 3% of the full sale price |
| Over $3,500,000 | 3.5% | 3.5% of the full sale price |
The hypothetical examples cover only the Graduated Percent Fee. The seller also owes the regular RTF.
The rate applies to the whole price
The fee works differently from income tax brackets. The Division calls it “a straight application of a percentage of total consideration.” Once a sale lands in a band, that band’s rate applies to every dollar of the price.
The Division’s own example: a $2.75 million deed transfer owes 2.5% × $2.75 million = $68,750 at recording, in addition to the seller’s other fees.
Which date sets the rate
The rate in effect on the date the deed is submitted to the county for recording is the one that applies. The contract date and the listing date do not set it.
Who pays the mansion tax in NJ?
By law, the seller does. The Division states that the seller is statutorily responsible for both the RTF and the Graduated Percent Fee.
Buyers and sellers can still change who pays in practice. The Division says the parties “are able to apportion or shift the burden of payment in their contract negotiations.” It treats those contract terms as private legal arrangements. It does not interpret contracts and sends questions about them to private legal counsel.
The Division also points out that legal liability matters for who can claim a refund and who is liable on audit. If your contract splits or shifts the fee, ask your attorney how that works with the seller’s legal responsibility.
What buyers should know
If you’re buying above $1 million, you may remember hearing that “the buyer pays 1%.” That was the rule before July 10, 2025. Now the law puts the fee on the seller, but a contract can still shift some or all of it to the buyer. Read the fee terms in any offer or counteroffer before you sign. If you’re still setting a budget, our guide on how much house you can afford in NJ can help.
Which properties does it apply to?
The fee applies to deeds where the property is classified as:
- Class 2 residential (one to four units)
- Class 3A farm property with a building suited for residential use
- Class 4A commercial (other than industrial or apartments)
- Class 4C cooperative units
Form RTF-1EE must be attached to every deed for consideration over $1,000,000, and its instructions list the exemptions. Ask your attorney or the title company handling your closing which class applies to your property and whether any exemption on the form fits your sale.
Standard NJ Realty Transfer Fee rates (over $350,000)
The Graduated Percent Fee is added on top of the regular RTF. When total consideration is over $350,000, the standard RTF schedule is:
| Portion of consideration | Rate per $500 |
|---|---|
| First $150,000 | $2.90 |
| Over $150,000 to $200,000 | $4.25 |
| Over $200,000 to $550,000 | $4.80 |
| Over $550,000 to $850,000 | $5.30 |
| Over $850,000 to $1,000,000 | $5.80 |
| Over $1,000,000 | $6.05 |
Reduced rates exist for senior citizens, blind or disabled persons, and low and moderate income housing. Your attorney or title company can give you the exact RTF figure for your sale.
The price cliffs at each band
Because the rate applies to the whole price, crossing a band threshold raises the fee on every dollar. Here is a hypothetical example at the $2 million line:
- A $2,000,000 sale falls in the 1% band: $20,000.
- A $2,000,100 sale falls in the 2% band: $40,002.
In this example, a price that is $100 higher adds $20,002 in this fee alone. The same kind of jump happens at $2.5 million, $3 million, and $3.5 million.
If your home could sell near one of these lines, bring this up with your agent and attorney when you set a list price and review offers. They can show you how each offer, including any contract terms on who pays the fee, affects your net proceeds. If you’re early in the process, our guide to selling a house in New Jersey covers the steps from listing to closing.
What changed in July 2025
Here is what P.L. 2025, c. 69 changed, starting July 10, 2025:
- Who pays: The fee moved from the buyer (grantee) to the seller (grantor).
- The rate: The flat 1% became a graduated schedule from 1% to 3.5%.
- The name: The “mansion tax” became the Graduated Percent Fee, a supplement to the RTF.
The law also had a transition rule. Sellers with contracts fully executed before July 10, 2025, on deeds over $2 million recorded on or before November 15, 2025, could seek a refund of the amount above 1% using Form RTF-3 within one year of recording. New deals can no longer qualify, because that recording deadline has passed. Other refund claims for the Graduated Percent Fee must be filed within 90 days of payment.
A note before you plan
This article is general education and is not tax or legal advice. For your specific sale, talk with a New Jersey real estate attorney or a tax professional.
If you’re adding up seller costs, keep in mind that a brokerage listing fee is separate from state transfer fees. Here’s how Houwzer’s 1% listing fee works in New Jersey.
Frequently asked questions
Who pays the mansion tax in NJ?
Since July 10, 2025, the seller is legally responsible for the Graduated Percent Fee, which replaced the buyer-paid mansion tax. The seller is also statutorily responsible for the regular RTF.
What are the NJ mansion tax rates in 2026?
The official rates are 1% over $1,000,000 up to $2,000,000; 2% over $2,000,000 up to $2,500,000; 2.5% over $2,500,000 up to $3,000,000; 3% over $3,000,000 up to $3,500,000; and 3.5% over $3,500,000. The rate that applies is set by the date the deed is submitted for recording.
Is the mansion tax charged on the whole sale price?
Yes. The Division calls it “a straight application of a percentage of total consideration,” so the band’s rate applies to the full price. A $2.75 million sale owes 2.5% of $2.75 million, or $68,750.
Can the buyer agree to pay the mansion tax?
The Division says the parties can apportion or shift the payment in contract negotiations. It treats those terms as private arrangements and does not interpret contracts. Legal liability still matters for refunds and audits, so have your attorney review the wording.
Does the mansion tax apply to co-ops and other property types?
It applies to Class 4C cooperative units, as well as Class 2 residential (one to four units), Class 3A farm property with a residential building, and Class 4A commercial property other than industrial or apartments. Form RTF-1EE, attached to deeds over $1,000,000, lists the exemptions.
