New Jersey Increases “Mansion Tax” as Part of 2026 State Budget

Susan Heckman

July 3, 2025

On June 30, 2025, New Jersey lawmakers approved the state’s 2026 budget, which includes a significant revision to the Realty Transfer Fee—commonly known as the “Mansion Tax.” The updated legislation introduces a tiered supplemental fee on high-value real estate transactions and shifts the tax burden from buyers to sellers.

First enacted in 2004, the mansion tax imposed a 1% fee on the sale of properties priced over $1 million, typically paid by the buyer. At that time, the median home price in New Jersey was approximately $350,000. Today, that figure has climbed to around $550,000, and in many neighborhoods throughout the state, $1 million homes are increasingly common—without necessarily being luxury properties.

Under the new law, sellers will now shoulder the cost of this tax, with closing expenses starting at $10,000 and escalating significantly depending on the final sales price.

The new tax applies to single-family homes, condos and co-ops, 1-4 family properties, and some commercial properties as well.

Here’s the breakdown of the new tax on home sales over $1,000,000:

$1,000,000 - $1,999,999	The existing 1% “mansion tax” remains, but the responsibility shifts from the buyer to the seller, amending the 2004 law
$2,000,000 - $2,499,999	2.0% tax on the seller
$2,500,000 - $2,999,999	2.5% tax on the seller
$3,000,000 - $3,499,999	3.0% tax on the seller
$3,500,000 and above	3.5% tax on the seller

Key dates to note:

• Contracts fully executed on or after July 10, 2025: The 1% buyer-paid fee is eliminated. Instead, the seller will pay a new tiered supplemental fee based on the sale price.

• Contracts executed prior to July 10, 2025, with deeds recorded by November 15, 2025: Any supplemental fee paid in excess of 1% will be refunded to the seller.

---

Wondering how much the realty transfer fee will be on a purchase? Click the RTF Calculator HERE

---

I would be happy to discuss these tax changes and how they can affect your real estate transaction.  Email me at heckmanbroker@gmail.com to schedule a consultation – and explore your options with a qualified and experienced local Broker.

Susan Heckman, Broker-Associate

Cell 732-687-9980

suehex.com

Source: NJRealtor.com