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FAQs on Increase in the New Jersey Mansion Tax


We now know the Legislature has passed and the Governor has signed the “Budget Bill” which effects several taxes, including the Mansion Tax, which we will now discuss.

When will the new Mansion Tax take effect?

The new Mansion Tax will apply to any transaction that settles (i.e., closes) on or after July 10, 2025. 

Who is Responsible for paying the Mansion Tax for transactions that close on or after July 10, 2025? 

The Seller will now be responsible for the payment of the Mansion Tax.

What is the Rate for the Mansion Tax for transactions that close after July 10, 2025?

The New Mansion Tax still only applies to Transactions over $1,000,000.00. For transactions that exceed $1,000 000.00 the rate as of July 10, 2025 is as follows:

$1,000,000.01 to $2,000,000.00:         1.0%

$2,000,000.01 to $2,500,000.00:         2.0%

$2,500,000.01 to $3,000,000.00:         2.5%

$3,000,000.01 to $3,500,000.00:         3.0%

$3,500,000.01 and over:                       3.5%

What should we do for Transactions that are closing before July 10, 2025?

For Transactions closing before July 10, 2025 you should continue to charge the Mansion Tax to the buyer and it should be computed using the existing rate. In addition, you should collect the difference between the old rate and the new rate, which will be paid by the seller, and hold that amount in Escrow. If the Deed is recorded and the old Mansion Tax as charged is accepted, you can return the escrow to the Seller. If the Deed is not recorded based on a ruling that the new Mansion Tax rate applies, you will then have the necessary funds to satisfy the additional Mansion Tax. We note this period of “overlap” will have the practical affect of both Buyer and Seller contributing towards the Mansion Tax.

What do we do with Transactions that close on or after July 10, 2025 but have a Contract date prior to July 10, 2025?

Closings that occur on or after July 10, 2025, will require that the new Mansion Tax to collected from the Seller. If the closing is pursuant to a contract fully executed on or before Wednesday, July 9, 2025, and the deed is recorded before Saturday, November 15, 2025, the buyer is still responsible for the 1%, and the balance that would be due under the new act should be collected from the Seller. This additional amount must be remitted together with the Deed for recording; however, the Seller will be eligible for a refund of the additional fees paid in excess of the 1% old Mansion Tax upon submission of a claim for a refund; the seller must file this claim with the Division of Taxation within one year of recording of the deed. 

What do we do with Transactions that close after July 10, 2025 with a contract dated after July 10, 2025.

The new Mansion Tax is fully collectible from the Seller, not the responsibility of the Buyer, and to be remitted to the County upon submission of the Deed for recording.

Is there anything else that we need to know?

It is anticipated that the State Division of Taxation will update its forms, but should that not occur prior to Thursday, June 10, 2025, continue to use the currently available forms.