New Jersey Graduated Percent Fee: Current Seller-Paid Rates for 2026

*Last reviewed: September 14, 2026*

If you've been researching the cost of buying or selling a home in New Jersey, you may have come across references to the "mansion tax" — a fee that applied to residential transactions at $1,000,000 or more. As of July 10, 2025, that tax has been significantly restructured. The official name has changed to the Graduated Percent Fee, who pays it has changed, and the rate structure has changed.

Here is what you need to know.

What Changed

Before July 10, 2025, New Jersey imposed a flat 1% mansion tax on the buyer for any residential purchase at $1,000,000 or more. A buyer purchasing a $1,200,000 home owed $12,000 at closing — on top of title insurance, attorney fees, and all other buyer costs.

Effective July 10, 2025, the fee is now paid by the seller. The rate is no longer flat — it is graduated, starting at 1% and rising to 3.5% on the highest-value sales. The rate applies to the entire purchase price, not just the amount above the threshold. The fee is supplemental to the ordinary Realty Transfer Fee, which remains a separate charge.

The Official Five-Tier Schedule

The new fee is officially called the Graduated Percent Fee — sometimes informally called the mansion tax. The rate tiers are:

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Because the rate applies to the full purchase price — not just the amount above each tier — the jump at each threshold is significant. A seller closing at $2,000,000 owes 1% on the entire $2,000,000 ($20,000). A seller closing at $2,100,000 owes 2% on the entire $2,100,000 ($42,000).

The fee applies to covered property classifications, including Class 2 residential, Class 3A farm property when the statutory residential-building condition is met, Class 4A commercial property other than industrial or apartment property, and Class 4C cooperative units. Exemptions and filing requirements must be checked separately.

The seller is statutorily responsible for the Graduated Percent Fee. The ordinary Realty Transfer Fee remains a separate charge.

Official source: NJ Division of Taxation — Realty Transfer Fee | NJ Graduated Percent Fee Notice

What This Means If You Are Buying in New Jersey

If you are buying a home in New Jersey above $1,000,000, you no longer owe this fee at closing. That is a meaningful change — on a $1,200,000 purchase, buyers previously owed $12,000 in mansion tax. That cost is now gone from the buyer's side of the ledger.

That said, sellers are aware of this cost and will factor it into their pricing and negotiating position. The fee is real — it has just moved to the other side of the table.

If you are buying near the $1,000,000 threshold, the dynamic has also shifted. The incentive to keep the price below $1,000,000 is now on the seller's side — a seller pricing at $1,050,000 owes 1% on the full amount ($10,500); a seller pricing at $995,000 owes nothing.

What This Means If You Are Selling in New Jersey

If you are selling a New Jersey home above $1,000,000, the Graduated Percent Fee is now a line item against your net proceeds. Because the rate applies to total consideration, crossing a threshold can materially change the fee. The exact statutory endpoint and closing calculation should be confirmed for the deed-recording date.

Deeds submitted for recording on or after July 10, 2025 are subject to the current Graduated Percent Fee framework, subject to applicable property classifications, exemptions, and filing requirements.

Your attorney should include this in your closing cost estimate from the beginning of the transaction.

The Practical Takeaway

The law changed. If you are working from information you gathered before July 2025, the NJ mansion tax information you have is likely outdated. The buyer no longer pays it. The seller does, at a graduated rate applied to total consideration.

If you are buying or selling in New Jersey above $1,000,000, make sure your attorney is current on the new structure and has modeled it into your cost estimate.

Pete Weinman, Esq. is a residential real estate attorney licensed in New York and New Jersey. If you are selling on Staten Island and buying in New Jersey — or selling in New Jersey — contact Pete at 718-442-2010 or [email protected].

260 Christopher Lane, Suite 201 | Staten Island, NY 10314

*This article provides general educational information and is not legal, tax, accounting, lending, or financial advice. Tax rates, exemptions, filing requirements, and closing practices may depend on the property, transaction structure, applicable law, and closing date. Confirm the current calculation with the appropriate attorney, lender, title company, closing agent, or tax professional.*