Understanding the New Jersey Real Estate Transfer Fee

What Is the New Jersey Realty Transfer Fee?   Click Here for the calculator

The New Jersey Realty Transfer Fee (commonly called the “RTF”) is a state-imposed fee paid when ownership of real estate is transferred from a seller to a buyer. In most residential real estate transactions throughout New Jersey, the seller is responsible for paying this fee at closing.

The fee is collected by the county recording office when the deed is officially recorded.

How Is the Transfer Fee Calculated?

The Realty Transfer Fee is based primarily on the property’s sale price. The higher the sale price, the higher the fee. New Jersey uses a tiered calculation system, meaning different portions of the sale price are taxed at different rates.

Additional fees may also apply depending on:

• The purchase price
• Whether the property is residential or commercial
• Whether the seller qualifies as a senior citizen, disabled person, or low-to-moderate income housing seller
• Whether the buyer pays the “Mansion Tax”

Because of the multiple calculations involved, transfer fees can vary significantly from one transaction to another.

Who Pays the Realty Transfer Fee?

In most traditional residential transactions in New Jersey:

• The seller pays the Realty Transfer Fee
• The buyer may pay a separate Mansion Tax on properties sold for $1,000,000 or more

While these are the standard practices, contract terms can sometimes vary depending on negotiations between the buyer and seller.

What Is the New Jersey Mansion Tax?

New Jersey imposes a 1% Mansion Tax on residential properties and certain commercial properties sold for $1,000,000 or more.

Typically:

• The Seller pays the Mansion Tax
• The tax equals 1% of the purchase price

For example:

• A home purchased for $1,200,000 would generally result in a $12,000 Mansion Tax paid by the seller.

Are There Any Exemptions or Reduced Fees?

Some sellers may qualify for reduced transfer fees, including:

• Senior citizens
• Disabled individuals
• Certain low-to-moderate income housing transactions

There are also certain transfers that may be exempt from transfer fees altogether, such as:

• Transfers between family members in specific situations
• Transfers involving estates or trusts
• Certain corporate or legal entity transfers

Because every transaction is unique, it is important to consult with your real estate attorney or closing professional regarding your specific situation.

Other Closing Costs to Consider

In addition to the Realty Transfer Fee, buyers and sellers in New Jersey may also encounter:

• Attorney fees
• Title insurance
• Recording fees
• Mortgage-related costs
• Inspection fees
• Survey fees
• Municipal certifications and smoke detector certifications
• Property tax adjustments

Understanding these costs ahead of time can help avoid surprises during the closing process.

Need Help Understanding Your Estimated Closing Costs?

Whether you are buying or selling a home in New Jersey, I can help you better understand the estimated costs associated with your transaction and guide you through the process from start to finish.

If you have questions about the New Jersey Realty Transfer Fee, Mansion Tax, or closing costs in general, feel free to contact me anytime.