Published · Mike Certo, NMLS #260555
New Jersey flipped the mansion tax to the seller in 2025. Here is what it costs now.
If you are buying or selling a New Jersey home over $1 million, the rule you probably read online is wrong. The mansion tax is no longer a flat 1% paid by the buyer. Since mid-2025 the seller pays a graduated fee that climbs to 3.5%. Here is the current math.
What changed
Through mid-2025, New Jersey charged a flat 1% "mansion tax" on home sales over $1 million, and the buyer paid it. As part of the state's fiscal-year 2026 budget, that ended. For any purchase contract fully executed on or after July 10, 2025, the fee became graduated and moved to the seller. It is a meaningful shift in who writes the check and how big it is.
The new graduated rates
The rate now depends on the sale price, and it applies to the entire consideration, not just the amount over each bracket.
| Sale price | Seller-paid rate | Example |
|---|---|---|
| $1M to $2M | 1.0% | $12,500 on $1.25M |
| $2M to $2.5M | 2.0% | $44,000 on $2.2M |
| $2.5M to $3M | 2.5% | $67,500 on $2.7M |
| $3M to $3.5M | 3.0% | $96,000 on $3.2M |
| Over $3.5M | 3.5% | $140,000 on $4M |
NJ Division of Taxation, verified August 2026. Contracts signed before July 10, 2025 with deeds recorded by November 15, 2025 could still claim the old 1% buyer rate.
Who this hits
New Jersey is expensive, so this reaches more homes than "mansion" suggests. In Bergen, Hudson, Essex, and the wealthier Shore and Morris County towns, plenty of ordinary single-family homes cross $1 million. If you are selling in those markets, the graduated fee belongs in your net-proceeds math from day one. If you are buying, you are off the hook for the mansion tax now, which slightly improves your cash-to-close compared to the old rule.
The loan side is unusual too
Those same high-priced counties are high-cost for loan limits. Twelve New Jersey counties carry a 2026 conforming limit of $1,209,750 instead of the $832,750 baseline. And there is a quirk: FHA in those counties reaches $1,249,125, about $39,000 higher than conforming, so an FHA loan can actually be larger than a conforming one at the same address. If your North Jersey price sits between those two numbers, the loan type you choose changes what you can borrow. The transfer-fee and closing-cost page lays out both.
New Jersey mansion tax FAQ
Who pays the New Jersey mansion tax in 2026?
The seller. For contracts signed on or after July 10, 2025, New Jersey replaced the old flat 1% that the buyer paid on homes over $1 million with a seller-paid graduated fee. It runs 1% from $1 million to $2 million, up to 3.5% above $3.5 million, on the whole price. Guides that still say the buyer pays 1% are describing the old rule.
How much is the mansion tax on a $1.5 million New Jersey home?
$15,000, paid by the seller. In the $1 million to $2 million bracket the rate is 1%, applied to the entire price, so 1% of $1.5 million is $15,000. The rate rises in steps above $2 million, reaching 3.5% over $3.5 million. The base Realty Transfer Fee is separate and also the seller's cost.
Did the buyer's 1% mansion tax go away entirely?
Yes, for contracts signed on or after July 10, 2025. The buyer no longer pays the mansion tax; the seller pays the new graduated fee instead. Buyers of homes over $1 million in New Jersey benefit from the change on their cash-to-close, while sellers of high-value homes now carry a larger, tiered cost.
Figures verified against the NJ Division of Taxation and FHFA, August 2026. Rates and brackets can change; confirm before you rely on them. This is not a commitment to lend.