NJ Mansion Tax Exemptions: Which Transfers Don't Owe the Graduated Percent Fee?

New Jersey's law lists three exemptions from the Graduated Percent Fee, the fee most people still call the mansion tax: a buyer that's a 501(c)(3) organization, certain transfers incidental to a corporate merger or acquisition, and certain intercompany transfers within a combined group. The fee also applies only to certain property classes, and a deed over $1,000,000 needs Form RTF-1EE whether or not an exemption is claimed.

I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. If you're selling a $1 million-plus home in Monmouth or Ocean County, the exemption question comes up early. Here's what the State's own documents say, in plain terms, ready for the conversation with your attorney.

What is the mansion tax in New Jersey, officially?

It's the Graduated Percent Fee. P.L. 2025, c. 69 was approved June 30, 2025 and applies to transfers on or after July 10, 2025. The NJ Division of Taxation's notice says the old 1% fee on buyers became a graduated fee that "is legally imposed on the grantor instead of the grantee," meaning the seller. It runs from 1% of the whole price over $1,000,000 to 3.5% over $3,500,000, with the brackets and math in who pays the mansion tax and how much and what it costs to sell a $1 million-plus home.

Which transfers are exempt from the Graduated Percent Fee?

The statute, N.J.S.A. 46:15-7.2 as amended, says the fee "shall not apply to a deed" in three cases:

1. The buyer is a 501(c)(3) organization. The grantee must be an organization the IRS has determined is exempt under section 501(c)(3). The Division's Graduated Percent Fee information sheet says that "any seller for any property, regardless of class, will not be liable" for the fee in that case.
2. A corporate merger or acquisition. The transfer is incidental to a merger or acquisition, and the real property's equalized assessed value is less than 20% of the total value of all assets exchanged. Form RTF-1EE requires a calculation and an attached Form RTF-4.
3. An intercompany transfer. A transfer entered into on or after January 1, 2021 between combined group members as part of the unitary business. The form asks for the group's NU ID number.

The last two are business transactions. The State's documents also address the property's class and the realty transfer fee's own list of exempt deeds.

Which property classes owe the mansion tax?

The fee applies when the property is classified on the municipality's tax list as:

• Class 2, residential property of one to four units;
• Class 3A farm property, if it has a building or structure intended or suited for residential use, plus other property transferred with it;
• Class 4A, commercial, other than industrial or apartments; and
• Class 4C cooperative units.

Form RTF-1EE lists the classes that aren't required to remit it: vacant land (Class 1), qualified farm property (3B), industrial (4B), apartments, and public property (Class 15). The Division explains that property a 501(c)(3) owns and that's exempt from local property tax is listed as Class 15, so the fee isn't collected on that deed. The realty transfer fee still applies to these deeds unless one of its own exemptions fits.

The class comes from the municipality's assessment list "in the year of transfer," per the form, and the Division says you can find it on the tax list or by asking the municipal assessor. Once the assessor files the tax list, it can't be amended. Ask for a change mid-year, after the appeal deadline, and the Division says you pay the fee, then file a claim for refund, and its staff inspect the property. The statute allows a refund claim within 90 days after the fee is paid.

How are the realty transfer fee exemptions different?

They're a separate list. The realty transfer fee has its own exemptions in N.J.S.A. 46:15-10, claimed on Form RTF-1. The Division's realty transfer fee page lists deeds for less than $100, between husband and wife or parent and child, recorded within 90 days after a divorce decree between the two parties, from an executor or administrator to an heir to distribute an estate, on partition, and others.

Form RTF-1EE has its own section for a deed that's "fully exempt from the Realty Transfer Fee," and it warns: "Mere reference to exemption symbol is insufficient. Explain in detail." Its instructions reprint the same list of exempt deeds. Whether one fits your deed is your attorney's call.

One difference worth knowing: the lower rates for senior citizens, blind or disabled persons, and low and moderate income housing are a partial exemption from the realty transfer fee, claimed on Form RTF-1. They aren't among the three Graduated Percent Fee exemptions in the statute.

What is Form RTF-1EE, and who signs it?

It's the Affidavit of Consideration for Graduated Percent Fee (Rev. 8/7/25). The Division says it "must be annexed to every deed for consideration over $1,000,000 and with every commercial property transfer." The statute says the affidavit is required whether or not the transfer is exempt, as a prerequisite for recording the deed.

• Who signs. The seller or a legal representative. The form reads "legal representative" broadly: an attorney for one of the parties, a closing officer of a title company or lender, or someone holding the seller's power of attorney.
• What it states. The consideration, the block and lot, the property class from the municipality's assessment list, and any exemption claimed.
• Why accuracy matters. The form says knowingly falsifying the consideration, or falsely declaring a transfer exempt, is a crime of the fourth degree.

What about sales under contract before July 10, 2025?

The law has a transition rule. If the deed was over $2 million, the contract was fully executed before July 10, 2025, and the deed was recorded on or before November 15, 2025, the seller may request a refund of any fee paid above 1% by filing a claim, Form RTF-3, within one year after the deed was recorded. If that describes your sale, talk to your attorney about the date.

Who decides whether an exemption applies?

Your attorney, working with the title company or settlement agent who prepares the closing papers. The Division's July 2025 memo says it isn't the Division's role "to interpret provisions of contracts between two private parties or to offer legal advice," and it isn't mine either. My job is putting the fee in your numbers from the first conversation, so it never surprises you at closing.

Start with what your home is worth on my home value tool, see the luxury homes page, and get my free Luxury & Waterfront Guide. For the other closing documents, read what paperwork you need to sell in New Jersey.

Frequently Asked Questions

Is there a mansion tax exemption for seniors in New Jersey?

Not among the three in the Graduated Percent Fee statute. Sellers who qualify can get lower realty transfer fee rates on Form RTF-1. Your attorney confirms what applies.

Does the mansion tax apply to commercial property in New Jersey?

Class 4A commercial property is on the State's list, other than industrial or apartments. Form RTF-1EE lists Class 4B industrial property as not required to remit the fee.

Does vacant land over $1 million owe the mansion tax?

Form RTF-1EE lists Class 1 vacant land among the classes not required to remit it. The realty transfer fee still applies unless one of its exemptions fits.

Do I need Form RTF-1EE if my sale is exempt?

Yes, if the deed is over $1,000,000 and includes property that would otherwise owe the fee. The statute requires the affidavit whether or not the transfer is exempt.

This is general information, not legal, tax or lending advice. Your attorney and settlement agent decide which exemptions, if any, apply to your deed.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. He has been in construction since 2003, building and renovating New Jersey homes. Read more about Dennis Mark.

Keep reading

• What does it cost to sell a $1 million-plus home in New Jersey?
• NJ mansion tax: who pays it now, and how much is it?
• When I sell my home, do I pay tax?
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.