What Changed on July 10, 2025
Two things changed at once. The seller now pays the fee, and the old flat 1 percent became a tiered rate that climbs with the sale price.
Governor Murphy signed the legislation on June 30, 2025, and it took effect July 10, 2025. The fee was renamed the Graduated Percent Fee, though most people still call it the mansion tax. Under the old 2004 rule, the buyer paid a flat 1 percent on any sale over $1 million. Under the new rule, the obligation shifts entirely to the seller, and the rate is no longer flat.
One point gets missed constantly. The Graduated Percent Fee is separate from the standard Realty Transfer Fee. Sellers already paid the Realty Transfer Fee. Now they pay both. That is worth knowing before you build your net sheet.
The 2026 Tiers, and Why the Math Is Brutal at the Edges
The rate applies to the entire sale price, not just the portion above a threshold. Cross a tier by one dollar and the higher rate hits the whole number.
Sale price | Fee (paid by seller) |
|---|---|
$1,000,000 to $2,000,000 | 1.0 percent |
$2,000,000 to $2,500,000 | 2.0 percent |
$2,500,000 to $3,000,000 | 2.5 percent |
$3,000,000 to $3,500,000 | 3.0 percent |
Above $3,500,000 | 3.5 percent |
Run the numbers and the jumps become clear. A $1.5 million Tenafly colonial owes $15,000. A $2.2 million home owes $44,000. A $2.7 million sale owes $67,500. A $3.2 million Englewood Cliffs property owes $96,000. A $4 million sale owes $140,000.
Now look at the cliff. A home that sells for exactly $2,000,000 owes $20,000 at 1 percent. The same home selling for $2,020,000 owes $40,400 at 2 percent. A $20,000 bump in price creates roughly $20,000 in additional tax. That is not a rounding issue. It is a structural feature of the law, and it shows up at every tier line.
What This Means for Your Net Proceeds and Your Pricing
You need this number in your net sheet before you set a list price, not after you accept an offer.
For any home sitting near a tier line, pricing strategy is now a tax decision. Listing at $2,049,000 instead of $1,995,000 can swing your fee by more than $20,000 for a difference in price the market may not even reward. The right number is the one that nets you the most after the fee, and that takes a real net sheet, not a guess.
The fee is legally the seller's, but the contract can allocate it differently if both sides agree. Your leverage there depends on price and competition. The Bergen County single-family market remains tight, with a March 2026 single-family median of $851,000 and homes selling at about 102.8 percent of list price according to NJ Realtors. That strength helps. But the buyer pool thins out above $2 million, and on those deals the fee becomes a genuine negotiation point.
Start with a precise valuation and a line-by-line net sheet. You can request a home value and net analysis before you commit to a price. If your sale is part of settling an estate, the fee matters even more, and I walk through that in the Bergen County estate sale playbook.
The Grace-Period Refund, and Who Still Qualifies
If your contract was fully signed before July 10, 2025 and the deed recorded by November 15, 2025, you may be able to claim a refund of anything you paid above the old 1 percent.
That window has closed for new deals. But if you closed inside that transition period, you generally have one year from the date the deed was recorded to file a refund claim with the New Jersey Division of Taxation. If that describes your sale, raise it with your closing attorney before the year runs out.
Exemptions and the Properties This Does Not Touch
Not every sale over $1 million triggers the fee, and most lower-priced sales are not affected at all.
Sales under $1 million are outside the Graduated Percent Fee entirely, which covers a large share of Bergen and Hudson County condo sales and many single-family sales. Certain transfers are exempt as well, including some transfers between close family members and specific property classes such as vacant land and multi-family buildings with five or more units. Co-op units and Class 4A commercial property are covered by the fee. The exemption rules carry real detail, so confirm your specific situation with a New Jersey real estate attorney before you assume anything.
The Three Pillars Behind Every Smart Sale
My work with Bergen County sellers is built on three pillars, because a sale this size is rarely just about the house. It sits at the intersection of timing, finances, and the life you are moving toward.
Timing & Strategy
When to list, how to price around the tax tiers, and whether selling now fits your larger plan. Start with the assessment at yourselleckgroupresources.com/quiz.
Financing & Cash-Flow
Your net sheet, the Graduated Percent Fee, the standard Realty Transfer Fee, and what you actually keep at closing. See the advisory approach at scott.sellecksellsnj.com.
Lifestyle & Location Fit
Where the next chapter lands, whether that is downsizing locally or a move out of state. Explore the town and neighborhood guides at communityguides.sellecksellsnj.com.
A lower tax bill by itself is not the goal. The goal is making sure your price, your net, and your next move are working together instead of pulling against each other.
Frequently Asked Questions
Does the buyer still pay the 1 percent mansion tax in New Jersey?
No. For deeds recorded on or after July 10, 2025, the buyer's flat 1 percent fee was eliminated and the obligation shifted to the seller as a tiered Graduated Percent Fee. Buyers benefit from the change, while sellers of homes over $1 million now carry the cost at closing.
Is the mansion tax the same as the Realty Transfer Fee?
No. They are two separate charges, and sellers in New Jersey now pay both. The Realty Transfer Fee has existed since 1968. The Graduated Percent Fee, formerly the mansion tax, is an additional fee that applies only to sales above $1 million.
How much is the mansion tax on a $2 million home in New Jersey?
On a sale at exactly $2,000,000, the Graduated Percent Fee is 1 percent, or $20,000. At $2,020,000 it jumps to 2 percent, or $40,400, because the rate applies to the entire sale price once you cross the $2 million line.
Can I make the buyer pay the mansion tax?
The fee is legally the seller's responsibility, but the contract can assign it differently if both parties agree. In practice it becomes a negotiation point, and your ability to shift it depends on your price tier and how competitive your listing is in the current market.
Does this affect Bergen County homes under $1 million?
No. The Graduated Percent Fee only applies to sales above $1 million. Most Bergen and Hudson County condo sales and many single-family sales fall below that threshold and owe nothing on this particular fee.
This post is for general information only and is not legal or tax advice. Mansion tax rules, exemptions, and refund deadlines carry detail specific to each transaction. Confirm your situation with a qualified New Jersey real estate attorney and tax professional before acting.
Top 5 Sources
- NJ REALTORS, Realty Transfer Fee and Graduated Percent Fee overview, 2025.
- Morgan Lewis, New Jersey Mansion Tax Changes Impose Higher Transaction Costs, July 2025.
- New Jersey Division of Taxation, Realty Transfer Fee information.
- Scott Selleck Foundation Document for voice, positioning, and advisory framing.
- Scott Selleck Link Directory for CTA structure, internal linking, and required site references.
