Princeton Town Topics – Let’s Talk Real Estate – February 25, 2026
HOW NEW JERSEY’S GRADUATED MANSION TAX IMPACTS TODAY’S SELLERS
New Jersey’s so-called “mansion tax” was overhauled in 2025, dramatically reshaping who pays and how much. Previously, home buyers paid a flat 1% surcharge on real estate transfers over $1 million. But under legislation signed on June 30, 2025, effective July 10, 2025, the burden now falls squarely on sellers for transactions exceeding $1 million.
The tax is now graduated based on sale price, rather than a flat rate. Sellers pay 1% for homes between $1 million and $2 million, and the rate rises with value: 2% at $2-2.5 million, 2.5% at $2.5-3 million, 3% at $3-3.5 million, and 3.5% on sales above $3.5 million.
This shift increases closing costs for high-end sellers and is designed to raise more revenue for state priorities, while eliminating the surcharge for buyers. Transitional refunds are available for certain deals executed before the law took effect.
