The New Jersey real estate market just experienced a major shift that every seller—and especially luxury homeowners—needs to know about.
As of July 10, 2025, a new law has changed how the so-called “Mansion Tax” works. What was once a buyer’s expense is now the seller’s responsibility, and at a steeper cost than ever before.
What Changed with the Mansion Tax?
The Mansion Tax, now formally referred to as the Graduated Percent Fee, has been around since 2004. Until now, buyers paid a flat 1% fee if the purchase price of a property exceeded $1 million.
Under the new law:
- Sellers are now responsible for paying the tax instead of buyers.
- The flat 1% rate has been replaced with a progressive structure that increases with the property’s sale price.
Here’s the breakdown of the new rates:
- $1 million – $2 million: 1% of the sales price
- $2 million – $2.5 million: 2% of the sales price
- $2.5 million – $3 million: 2.5% of the sales price
- $3 million – $3.5 million: 3% of the sales price
- Over $3.5 million: 3.5% of the sales price
This means a luxury homeowner selling a $3.6 million property would now owe $126,000 in Mansion Tax fees at closing—on top of other seller costs.
How This Differs from the Realty Transfer Fee
The Mansion Tax isn’t the only fee sellers face. New Jersey also requires a Realty Transfer Fee (RTF) on nearly all real estate sales, regardless of price point.
Here’s how the two stack up:
Realty Transfer Fee (RTF)
- Applies to nearly all property sales in New Jersey
- Established in 1968 to cover the state’s costs of tracking transactions
- Based on sales price, typically paid by the seller when recording the deed
Mansion Tax (Graduated Percent Fee)
- Applies only to properties sold for more than $1 million
- Originally introduced in 2004 to generate revenue from high-value transactions
- Previously paid by the buyer at a flat 1% rate
- As of July 10, 2025, now paid by the seller with progressive rates starting at 1% and maxing out at 3.5%
What This Means for Sellers
If you’re planning to sell a million-dollar-plus property in New Jersey, you’ll want to account for this new cost when calculating your net proceeds from the sale. Luxury sellers, in particular, could see tens—or even hundreds—of thousands of dollars in additional fees.
Working with an experienced real estate professional is now more important than ever. A knowledgeable agent can help you:
- Estimate your closing costs upfront
- Price your home strategically
- Navigate negotiations knowing buyers no longer shoulder the Mansion Tax
✅ Bottom line: Selling a high-value property in New Jersey just got more expensive for homeowners. The shift of the Mansion Tax burden from buyers to sellers is a game-changer in the market—especially for those in the $2 million+ price bracket.
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Marissa, The DiMare Group
