Since 1968, there has been a New Jersey Real Estate Transfer Fee, the purpose of which is to cover the tracking of annual real estate sales in the state.
Real estate processes in New Jersey can be difficult to navigate, especially when it comes to tax regulations. This is why, in certain scenarios, it is key to have an experienced property tax appeal lawyer in NJ.
Therefore, if you are seeking legal advice for this or any other real estate matter, do not hesitate to contact our NJ real estate attorney in advance.
FULL LEGAL REPRESENTATION AND COUNSELING
FLAT FEE RATE
Table of Contents
New Jersey Real Estate Transfer Fee In Detail For 2024
Pursuant to NJSA 46:15-7, New Jersey imposes a Realty Transfer Fee (RTF) on the seller of the property. This fee will be for recording the NJ property deed for sale.
- All of this means that the RTF proves that ownership was transferred between two parties. As a result, both buyers and sellers will pay a fee to move property from one individual to another.
- Transfer fees are proof that the real estate title to the property has passed from the seller to the buyer.
- Typically, the cost of this fee is usually 1% of the total value of the real estate transaction. Therefore, the price is calculated, paid and recorded when the title deed is registered.
This fee applies to each transfer of title to property in New Jersey, unless the transaction or deed has an exemption. The latter is established by laws NJSA 46:15-10 and NJSA 46:15-10.1.
To claim an exemption, an Affidavit of Consideration for Seller’s Use (Form RTF-1) must be submitted.
Application To The Sheriff Of Any County
When a petition is filed with the sheriff of any county for the sale of any type of real property, an affidavit of consideration must be filed for the sheriff’s deeds. This is through Form RTF-8 .
This statement lists the names of any mortgagees, lien holders, and the current balance of the mortgages that constitute the consideration. It should be noted that the RTF-8 is not an exemption from the RTF.
If you are in the middle of a foreclosure, you should not panic. That’s because our firm is also a nj foreclosure lawyer firm ready to represent you.
New Jersey Realty transfer Fee Exemptions
- In a partition. This typically occurs when selling a jointly owned home.
- When it is between spouses, or father and son.
- It is a sale due to delinquent assessments or taxes.
- For a consideration of less than $100.
- Its goal is to provide or release security for an obligation or debt.
- By a trustee, liquidation or assignee that benefits creditors.
- A foreclosure expresses a final judgment.
- For the release of a right of reversion.
- By or for the United States, the state, or any agency or subdivision of the same government.
- By an issuance of a cooperative corporation, as part of a conversion of all the assets of that corporation in a condominium to a shareholder. It usually occurs upon the shareholder’s delivery of all shares in the corporation and the lease of the property.
- By an executor or administrator of a decedent to an heir or legatee to effect a distribution of the decedent’s estate in accordance with the provisions of the will.
- For being registered within 90 days after the entry of a divorce decree that dissolves the marriage between the grantee and the grantor.
- By being previously registered in another county and the RTF is paid in full or accounted for, as evidenced by a writ witnessed by an official county dealer.
- If it was recognized or approved on or before July 3, 1968.
- It is eligible to be registered as an “ancient act” pursuant to RS 46:16-7.
- Confirms or corrects a previously registered title deed.
- Transfer of a cemetery lot or plot.
Where Can I Find The Regulation Of The New Jersey Realty Transfer Fee?
To find the regulations, individuals can consult our attorney Carolina T. Curbelo , or refer to chapter 16 at 38 NJR 3658(b).
Similarly, if you are wondering where to find the municipal code for the county of the city, you can consult it with our lawyer, or through the municipal codes.
Current New Jersey Realty Transfer Fees for 2023
Next, we will show the transfer rates in the state according to their category:
Standard Transactions And New Construction
- Total consideration does not exceed $350,000:
- $2.00/$500 consideration not to exceed $150,000.
- $3.35/$500 of consideration in excess of $150,000 but not in excess of $200,000.
- $3.90/$500 consideration in excess of $200,000 but not in excess of $350,000.
- Total consideration exceeds $350,000:
- $2.90/$500 consideration not to exceed $150,000.
- $4.25/$500 of consideration in excess of $150,000 but not in excess of $200,000.
- $4.80/$500 of consideration in excess of $200,000 but not in excess of $550,000.
- $5.30/$500 of consideration in excess of $550,000 but you do not have one of $850,000.
- $5.80/$500 of consideration in excess of $850,000 but you do not have one of $1,000,000.
- $6.05/$500 consideration in excess of $1,000,000.
Senior Citizens, Disabled Individuals, And Low- And Moderate-Income Households
- Total consideration does not exceed $350,000:
- $0.50/$500 consideration does not exceed $150,000.
- $1.25/$500 of consideration in excess of $150,000 does not exceed $350,000.
- Total consideration exceeds $350,000 :
- $1.40/$500 consideration not to exceed $150,000.
- $2.15/$500 consideration in excess of $150,000 but not in excess of $550,000.
- $2.65/$500 of consideration in excess of $550,000 but not in excess of $850,000.
- $3.15/$500 of consideration in excess of $850,000 but not in excess of $1,000,000.
- $3.40/$500 consideration in excess of $1,000,000.
Individuals who have claimed a partial exemption through Form RTF-1 must be notarized, attached, and recorded with the deeds. As a result, this will attest to the facts surrounding the partial waiver request.
Who Pays Transfer Taxes In New Jersey?
In New Jersey, the seller is responsible for paying all property transfer taxes.
- However, in some cases a contract may be drawn up whereby the buyer is responsible for covering some or all of the transfer taxes.
- Either way, the only time a buyer will have to put money toward transfer fees is when the total sale of the property exceeds $1 million.
Have you seen a clause in your contract called “Time is of the essence in real estate”? If so, then our recent post will be of great help to you.
The New Jersey Mansion Tax
The New Jersey mansion tax is a fee paid when a home worth more than $1 million changes ownership. Typically, in most cases, this includes Class 2 and 4A residential and commercial properties.
However, there are certain exceptions in some cases, where the tax is worth 1% of the total sale of the house.
These typically include transfers of real property made without payment or in connection with a sale, such as gifts and transfers made under federal bankruptcy law.
When Are Transfer Taxes Due In New Jersey?
Real property transfer taxes are generally due at closing. In addition, these taxes must be taken into account in the budget of each seller well in advance.
The total tax amount of the transfer will be indicated with the buyer’s and seller’s settlement forms.
If you are looking for information on how to buy a house in New Jersey or selling a house in New Jersey, do not hesitate to contact us.
Who Must Pay The Real Estate Fee?
The title deed must be transferred to pay the real estate transfer tax. As a result, Class 4A business assets, Class 2 residential properties, and Class 3A agricultural properties will be covered by this policy.
- Residential classes under Class 2: This term is used for a piece of land with a house. The transaction fee increases based on the size of the house.
- Agricultural property Class 3A: Cropland falls under the Class 3A classification. However, there are certain exceptions to this. For example, you will not be charged a transfer tax on land if the sole purpose is to grow a specific crop.
- Class 4A commercial property: Within this classification, any commercial property that obtains income solely from the land enters. An example of this are: Restaurants, shopping centers, cinemas and so on.
How Is The New Jersey Realty Transfer Fee Calculated?
Generally, this fee is based on 1% of the sale price of the property or through an appraised appraisal. There are times when the seller will list a much lower price on the deed than the actual value of the home.
If this happens, you may agree to receive an additional payment later on the sly in order to avoid paying more taxes. To avoid this, the principal’s ratio (market value vs. real estate appraisal value in New Jersey) is calculated.
It is then compared to the fee, thus ensuring an accurate value for the transaction. The deed will not be registered until payment is made.
For these matters, do not hesitate to contact us. Our law firm is an expert in everything related to real estate. Therefore, we can help you from a real estate appraisal, a home inspection in New Jersey or any other matter.
Is New Jersey Real Estate Transfer Fee Tax Deductible?
Although most real estate taxes can be deducted at the end of the year, transfer taxes in New Jersey cannot be deducted. As a result, neither the seller nor the buyer will be able to deduct these taxes.
- The only exception to this could be when the property is used as an investment or rental property. In which case, the seller could deduct the tax as a work expense.
- As we have seen, transfer taxes cannot be deducted, but they can help reduce the other taxes, since they are deducted from the total sale price.
- As a result, it will save the seller money on capital gains expenses at the end of the year.
Are you looking for information on how to become a landlord in New Jersey? Then check our respective blog, where we delve into all this topic.
New Jersey Realty Transfer Fee FAQ
Generally, a New Jersey quitclaim deed conveys the right, title, or interest that the grantor possesses or may possess in the property. However, it does not guarantee that the grantor has any particular title or legal interest in the property. Thus, the grantor only transfers any interest it has to the beneficiary.
In these cases it is best to contact our lawyer Carolina Curbelo or the property administration.
If the deed is recorded in the wrong county, an application for reimbursement must be filed with the state (Form RTF-3) and with the wrong county.
The sale of a home from a parent to a child is exempt from the transfer fee.
How Can We Help You With Your New Jersey Real Estate Transfer Fee?
Tax regulations on real estate transactions in New Jersey are overly complex. Therefore, it is advisable to enlist the help of an experienced professional to guide buyers and sellers in these matters.
Our attorney Carolina, has more than 10 years of experience dealing with these issues in the state. Therefore, buyers and/or sellers will be in the best possible hands.
Contact our team of professionals today so that we can evaluate how your real estate transfer is going and we can help you avoid making any type of mistake. This is because it could turn out to be very expensive and you lose the opportunity to buy and sell.
