New Jersey’s mansion tax cliffs.
Since July 10, 2025, the New Jersey seller pays a graduated fee of 1% to 3.5% on the entire price above $1 million. A $2,000,000 sale owes $20,000. At $2,000,001 it owes $40,000. One dollar of price costs the seller $20,000, and every sale up to $2,020,668 nets less than the sale at $2,000,000.
What changed in 2025.
Until July 10, 2025, New Jersey charged a flat 1% fee on residential sales over $1 million, and the buyer paid it. P.L.2025, c.69 renamed it the graduated percent fee, made it graduated, and moved it to the seller.
The seller now pays two state charges at closing:
- The realty transfer fee, unchanged by the 2025 law. It is charged per $500 of price in marginal brackets, reaching $6.05 per $500 (1.21%) above $1 million. On a $2,000,000 sale it is $21,675.
- The graduated percent fee: 1% above $1 million, 2% above $2 million, 2.5% above $2.5 million, 3% above $3 million and 3.5% above $3.5 million, each applied to the whole price.
The transfer fee rises smoothly with price. The graduated fee does not: its rate applies to every dollar of the price, so it jumps at each threshold. A New Jersey buyer now pays no transfer tax at all.
The five cliffs.
A price exactly at a threshold stays in the lower tier: the statute applies each rate to consideration “in excess of” the threshold. The last column is the price the seller must reach to net as much as at the threshold, after both state fees and before commission.
| Threshold | Fee at threshold | One dollar over | Jump | Price to net the same |
|---|---|---|---|---|
$1,000,000 none → 1% | $0 | $10,000 | +$10,000 | $1,010,230 $10,230 above |
$2,000,000 1% → 2% | $20,000 | $40,000 | +$20,000 | $2,020,668 $20,668 above |
$2,500,000 2% → 2.5% | $50,000 | $62,500 | +$12,500 | $2,512,982 $12,982 above |
$3,000,000 2.5% → 3% | $75,000 | $90,000 | +$15,000 | $3,015,664 $15,664 above |
$3,500,000 3% → 3.5% | $105,000 | $122,500 | +$17,500 | $3,518,367 $18,367 above |
The $2 million cliff is the costliest: the rate doubles, from 1% to 2%, so one dollar over adds $20,000. The bands above each threshold run from $10,230 to $20,668. Inside a band, a higher price leaves the seller with less.
Pricing around a cliff.
At the $2 million cliff, before commission:
- A $2,000,000 sale nets the seller $1,958,325.
- A $2,015,000 sale nets $1,952,844, $5,482 less, despite the higher price.
- A $2,050,000 sale nets $1,986,720, $28,395 more than at $2,000,000.
For sellers. A list price, a counteroffer or an accepted offer inside a band costs money. Price at the threshold, or clearly past the band. The sale-price comparison that matters is net to the seller, not gross price.
For buyers. The fee is the seller’s, so it does not change what the buyer pays at closing. It does change how an offer reads: an offer inside a band is worth less to the seller than an offer at the threshold. Offering exactly at a threshold can be the stronger offer.
Commission widens the band. The figures above exclude commission. Since commission scales with price, the price needed to clear each band is somewhat higher once it is included. Run the New Jersey seller calculator with your commission rate to see the net on a specific price.
Who pays, and when the rule applies.
- Liability: the seller (grantor). The Division of Taxation’s July 9, 2025 guidance treats any contract term shifting the fee to the buyer as a private arrangement between the parties; the State still holds the seller liable.
- Effective date: deeds submitted for recording on or after July 10, 2025, by the date of submission (a mailed deed counts from its postmark).
- The 2025 transition: a seller whose contract was fully signed before July 10, 2025, and whose deed was recorded by November 15, 2025, could claim a refund of anything above 1%, within one year of recording. No new sale qualifies.
- Property covered: residential property (Class 2), farms with a residence (Class 3A), commercial property (Class 4A) and cooperative units (Class 4C).
Exemptions and reduced fees.
- Senior, blind and disabled sellers (and some affordable housing) pay a reduced realty transfer fee. The reduction does not apply to the graduated fee.
- Graduated-fee exemptions include a 501(c)(3) buyer and certain corporate merger and intercompany transfers.
- Pending legislation: Senate bill S3309, introduced February 5, 2026, would restore a flat 1%. As of October 2026 it has had no committee action.
Closing counsel confirms whether any exemption applies to a specific sale.
Sources.
- P.L.2025, c.69 (amending N.J.S.A. 46:15-7.2 and 46:15-7.4)
- NJ Division of Taxation, realty transfer fee schedule
- NJ Division of Taxation, realty transfer fee FAQ
- S3309 (2026)
Rules verified October 12, 2026. Figures are computed from these schedules and exclude commission, attorney and recording costs. Fees on a specific sale are set at closing.
Pricing near a New Jersey threshold?
Send the town and the price range. We’ll run the net at each price and, where the sale connects to an NYC purchase, how the two sides fit together.
The Roebling Team at Compass executes transactions directly in Manhattan. For New Jersey buyers and sellers, we collaborate with Compass agents in New Jersey via referral — clients work with the best on-the-ground representation while keeping the analytical framework consistent across markets. This calculator is an informational research tool, not solicitation of representation.
For trans-market clients (Manhattan + New Jersey portfolios) or to discuss your specific transaction, schedule a consultation. Where appropriate, we’ll introduce you to a vetted Compass agent in the local market.