NJ Mansion Tax in 2026: Who Pays It and How Much Is It?
Published | Posted by Dennis Mark Interdonato
- Luxury
- Mansion Tax
- Home Selling
- Closing Costs
- New Jersey
The seller pays New Jersey's mansion tax now. Since July 10, 2025, the fee on home sales over $1 million, officially called the Graduated Percent Fee, is legally imposed on the seller, at 1% to 3.5% of the entire sale price depending on the bracket. That's a big change from the old rule, when the buyer paid a flat 1%, and it changes how a seller in Monmouth or Ocean County should look at price and net proceeds.
I'm Dennis Mark Interdonato with The Dennis Mark Group. When a home I'm selling could land above $1 million, this fee is part of the first conversation, not the last one. Here's how it works, in the State's own terms.
What is the mansion tax in New Jersey?
"Mansion tax" is the nickname. The NJ Division of Taxation describes it as a supplemental fee to the realty transfer fee, charged when the deed is recorded on a sale where the consideration (the price in the deed) is more than $1,000,000.
It applies to deeds where the property is classified as:
- Class 2 residential property
- Class 3A farm property, but only when the farmland has a building or structure meant for residential use
- Class 4A commercial property (other than industrial or apartment property)
- Class 4C cooperative units
Who pays the mansion tax now, the buyer or the seller?
The seller. On June 30, 2025, New Jersey enacted P.L. 2025, c. 69, effective July 10, 2025. In a July 2, 2025 notice, the Division of Taxation explained that the old 1% fee on sales over $1 million became a Graduated Percent Fee and is now "legally imposed on the grantor instead of the grantee." The grantor is the seller. The Division's realty transfer fee page says it directly: the seller is statutorily responsible for both the realty transfer fee and the Graduated Percent Fee.
How a particular contract handles closing costs is a question for your attorney. What the law says about who owes the fee is not in doubt.
How much is the mansion tax?
For deeds submitted for recording on or after July 10, 2025, the State lists these rates:
| Sale price (consideration) | Graduated Percent Fee |
|---|---|
| Over $1,000,000 up to $2,000,000 | 1% of the total price |
| Over $2,000,000 up to $2,500,000 | 2% of the total price |
| Over $2,500,000 up to $3,000,000 | 2.5% of the total price |
| Over $3,000,000 up to $3,500,000 | 3% of the total price |
| Over $3,500,000 | 3.5% of the total price |
Is it charged on the whole price or only the amount over $1 million?
The whole price. The Division calls it "a straight application of a percentage of total consideration." Its own example: a $2.75 million sale owes 2.5% of $2.75 million, which is $68,750, due at recording in addition to the other seller fees.
Here's the same math at a few other prices, using the State's rates:
- $1,500,000 sale: 1% of the full price, or $15,000
- $2,000,000 sale: 1%, or $20,000
- $2,050,000 sale: 2%, or $41,000
- $4,000,000 sale: 3.5%, or $140,000
Look at the second and third lines. Because the rate applies to the whole price, crossing a bracket line moves the fee on every dollar, not only the dollars above the line. A $50,000 higher price at that line adds $21,000 in fee. Your attorney and title company calculate the final figure for your deed, but you should see this math before you pick a list price, not after you accept an offer.
How does the mansion tax fit with the realty transfer fee?
They're two separate charges, and the seller owes both. The realty transfer fee applies to nearly every New Jersey sale and is figured from the price recited in the deed, at rates per $500 of consideration that rise with the price. On a sale over $1 million, the Graduated Percent Fee sits on top of it. Both come off what you net at closing.
The full list of what a seller pays on a $1 million-plus sale is in what it costs to sell a $1 million-plus home in New Jersey.
Are there exemptions?
Some transfers are exempt. The State requires an Affidavit of Consideration for the Graduated Percent Fee, Form RTF-1EE, with every deed for consideration over $1,000,000, and the exemptions are described on that form. Whether one applies to your sale is your attorney's call. The details are in NJ mansion tax exemptions.
What if your contract was signed before July 10, 2025?
The 2025 law included a one-time refund for sales caught in the switch. Under the Division's notice, a seller can request a refund of any Graduated Percent Fee paid above 1% when all three are true: the price 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 claim, on Form RTF-3, has to be filed within one year after the deed's recording date. If your sale fits and your deed was recorded late in 2025, talk to your attorney about that deadline now.
What does this mean for pricing your home?
I tell people what they need to hear, not what they want to hear, and on a sale over $1 million that includes the fees. The price still has to be right for the market, because the first two weeks on the market set the price. But a seller should never be surprised at the closing table by a number the State published in 2025.
If you're curious where your home sits, start with a free home value, then read how I approach a high-end sale on the luxury homes page and in the Luxury & Waterfront Guide.
Frequently Asked Questions
Does the buyer pay any mansion tax in New Jersey now?
Not under the law. For deeds recorded on or after July 10, 2025, the Graduated Percent Fee is legally imposed on the seller. How a contract allocates costs is a question for the attorneys.
Is the mansion tax charged on the full sale price?
Yes. The rate for the bracket applies to the total price, not only the amount above $1 million. A $2.75 million sale owes $68,750, according to the State's example.
When is the mansion tax paid?
It's due when the deed is recorded with the county, along with the realty transfer fee, so it's handled as part of closing.
Does the mansion tax apply to co-ops?
Yes. The Division of Taxation lists Class 4C cooperative units among the property classes the fee applies to.
What happens if the sale price is exactly $1,000,000?
The fee applies to consideration "in excess of" $1,000,000, so the first bracket starts above that number. Your attorney confirms the figure for your deed.
This is general information, not legal, tax or lending advice. Your attorney and tax professional advise on your sale. Rates and rules checked October 10, 2026, on the NJ Division of Taxation's realty transfer fee page and its July 2, 2025 notice, and they can change.
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. Read more about Dennis Mark.
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