As seen on: BINJE.com
By: Paul Bergeron
In July 2025, when New Jersey Gov. Murphy adopted the annual budget, it included a provision that had not been discussed and surprised many in the real estate community.
The legislation changed the “mansion tax” from a 1% buyer fee on purchases above $1 million to a 3.5% seller fee on purchases above $3.5 million, with a sliding scale up to 3.5%.
Before this legislation, a buyer of residential or commercial property in New Jersey with a purchase price of more than $1,000,000 would have to pay 1% of the purchase price as a “mansion tax” at the title closing. This is a separate tax from the realty transfer fee, which has always been a seller fee due at closing based upon a sliding scale established by statute.
The legislation is significant because it shifted the “mansion tax” (now called the “Graduated Percent Fee”) to the seller’s side of the ledger and substantially increased the fee amount (while keeping the realty transfer fee intact).
Example #1: The $20 million sale of commercial property used to result in a realty transfer fee of $239,475.00 (paid by the seller) and a mansion tax of $200,000 (paid by the buyer)
Now, the fee is $939,475, all of which is paid by the seller.
Example #2: The $2,000,000 sale of a residential dwelling used to result in a realty transfer fee of $21,675.00 (paid by the seller) and a mansion tax of $ 20,000 (paid by the buyer).
Now, the fee is $41,675, all of which is paid by the seller.
Example #3: The $50,000,000 sale of a commercial property used to result in a realty transfer fee of $602,475 (paid by the seller) and a mansion tax of $500,000 (paid by the buyer).
Now, the fee is $2,352,475, all of which is paid by the seller.