Updated · Mike Certo, NMLS #260555
New Jersey Transfer Fee, Mansion Tax and Closing Costs (2026)
New Jersey changed its mansion tax in 2025, and the change is big enough that most online guides are now wrong. The buyer no longer pays a flat 1%. The seller pays a graduated fee that climbs to 3.5%. Here is the current structure, the base transfer fee, and where the high-cost loan limits fit for North Jersey buyers.
The mansion tax that changed in 2025
This is the one to read carefully, because the old rule is everywhere online and it no longer holds. Through mid-2025, a buyer of a home over $1 million paid a flat 1% "mansion tax." As part of the state's fiscal-year 2026 budget, New Jersey scrapped that and put a graduated fee on the seller instead, for any contract fully executed on or after July 10, 2025.
| Sale price | Graduated fee (seller) | On the whole price |
|---|---|---|
| $1,000,000 to $2,000,000 | 1.0% | e.g. $12,500 on $1.25M |
| $2,000,000 to $2,500,000 | 2.0% | e.g. $44,000 on $2.2M |
| $2,500,000 to $3,000,000 | 2.5% | e.g. $67,500 on $2.7M |
| $3,000,000 to $3,500,000 | 3.0% | e.g. $96,000 on $3.2M |
| Over $3,500,000 | 3.5% | e.g. $140,000 on $4M |
NJ Division of Taxation, verified August 2026. The rate applies to the entire consideration, not just the amount over the bracket. Contracts executed before July 10, 2025 with deeds recorded by November 15, 2025 could still claim the old 1% buyer rate.
The base Realty Transfer Fee
Separate from the mansion tax, every New Jersey sale carries the Realty Transfer Fee, and the seller pays it. It is graduated per $500 of price, so it rises with the sale. The exact per-$500 rate depends on the price band and on whether the sale qualifies for a senior, disabled, or low-and-moderate-income partial exemption, so the schedule is not a single number. On a median-priced New Jersey home the RTF runs into the low thousands. Your settlement statement itemizes it, and the NJ Division of Taxation publishes the current schedule.
The high-cost loan limits, and the FHA gap
New Jersey is expensive, so the loan limits matter more here than in most states. Twelve counties are designated high-cost for 2026: Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, and Union. In those counties the conforming limit is $1,209,750, not the $832,750 baseline that applies to the rest of the state. There is a quirk worth knowing: FHA in those same counties tops out at $1,249,125, which is about $39,000 higher than the conforming limit. So at a given North Jersey address, an FHA loan can actually be larger than a conforming one. It is one of the few places that happens.
What else is in New Jersey closing costs?
Beyond the transfer fees, plan for the usual buyer costs, roughly 2% to 5% of the price:
- Title insurance and search at New Jersey rates, plus settlement fees.
- Lender and third-party fees (appraisal, credit, flood certification) on your Loan Estimate.
- Prepaids and escrows for homeowners insurance and New Jersey's high property taxes.
- Recording fees at the county clerk.
NJHMFA's assistance is built for the buyer side. It gives up to $15,000, or $22,000 with the first-generation add-on, as a 0% five-year forgivable second. The down payment assistance page shows how it layers.
New Jersey transfer fee FAQ
Who pays the New Jersey mansion tax now?
The seller. As of 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 graduated fee paid by the seller. It runs 1% from $1 million to $2 million, up to 3.5% above $3.5 million, applied to the entire price. Guides that still say the buyer pays 1% are describing the old rule.
How much is the New Jersey mansion tax on a $2 million home?
About $40,000, paid by the seller. The graduated fee is 2% in the $2 million to $2.5 million bracket, and the rate applies to the whole price, so 2% of $2 million is $40,000. Below $2 million the rate is 1%, and it climbs to 3.5% above $3.5 million. The base Realty Transfer Fee is separate and also the seller's.
Which New Jersey counties have a higher loan limit?
Twelve: Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, and Union. Their 2026 conforming limit is $1,209,750 instead of the $832,750 baseline. FHA in those counties reaches $1,249,125, so an FHA loan can exceed the conforming limit at the same address, which is unusual.
Does the buyer pay any transfer tax in New Jersey?
Generally no, not anymore on the mansion-tax side. Since July 2025 the graduated fee on homes over $1 million is the seller's, and the base Realty Transfer Fee has always been the seller's. Buyers still pay their own closing costs, title insurance, and prepaids, but the transfer fees themselves fall on the seller in a standard New Jersey deal.