New Jersey Real Estate Transfer Tax Changes: What to Know in 2026

New Jersey materially changed its real estate transfer tax structure beginning July 10, 2025, with the impact now fully reflected in 2026 transactions. The changes primarily affect transactions exceeding $1 million and shift significant tax liability to sellers.

Seller Now Pays the “Mansion Tax”

Previously, buyers paid a 1% tax on property purchases over $1 million. The law eliminates the buyer obligation and instead imposes the supplemental transfer tax entirely on the seller. This represents a meaningful shift in transaction economics and pricing strategy.

New Graduated Tax Rates

New Jersey replaced the flat 1% tax with a graduated rate applied to the entire purchase price:

• $1M–$2M: 1%

• $2M–$2.5M: 2%

• $2.5M–$3M: 2.5%

• $3M–$3.5M: 3%

• Over $3.5M: 3.5%

These amounts are assessed in addition to the standard Realty Transfer Fee.

Practical Implications

The revised structure increases closing costs for sellers of higher-value properties and is influencing pricing strategy, tax allocation provisions in contracts, and lender underwriting assumptions. In high-value New Jersey markets, transfer taxes have become a material factor in transaction planning.

For developers, investors, and property owners, careful tax planning and contract structuring are now essential components of real estate strategy.