A major change to New Jersey real estate law took effect in July 2025 that every homeowner with a property worth over $1 million needs to understand. The state replaced its flat 1% mansion tax with a graduated structure — and shifted the liability from buyer to seller.

The New Rate Structure

Previously, buyers paid a flat 1% realty transfer fee on homes over $1 million. Under the new law, sellers pay a graduated rate that can reach up to 3.5% on the highest-value transactions. This is a significant cost shift that directly impacts net proceeds for luxury home sellers.

What This Means for Sellers

If you own a home valued at over $1 million, your closing costs just increased substantially. On a $1.5 million sale, the difference between the old buyer-paid 1% and the new seller-paid graduated rate could be tens of thousands of dollars.

Planning Ahead

If you are considering selling a high-value property, it is critical to factor this new tax into your pricing strategy. A detailed net sheet showing all costs — including the graduated transfer fee, agent commission, attorney fees, and any outstanding mortgage — will help you set realistic expectations.

Should You Sell Before Values Rise Further?

Some sellers are choosing to list now rather than wait, reasoning that higher future values will push them into higher tax brackets under the graduated structure. Others are adjusting their asking prices upward to offset the cost.

Contact me for a confidential net proceeds analysis on your property.