New Jersey Homes Over $1 Million: What Changed — and Why It Matters

By Peter Hunt, Century 21 Action Plus Realty
WHY STRESS?

If you’re thinking about selling or buying a home in New Jersey priced over $1 million, there’s an important legal change you need to understand. In 2025, New Jersey significantly revised how high-value home sales are taxed — and it directly affects your bottom line.

Let’s break it down clearly and simply.

The Big Change: Who Pays the “Mansion Tax”

For years, New Jersey imposed what’s commonly known as the “mansion tax” on properties selling over $1 million. Historically:

• The buyer paid a flat 1% tax at closing.

That changed in July 2025.

Now:

• The seller pays the tax at closing.

• The tax is no longer a flat rate — it is now graduated based on the sale price.

The New Graduated Tax Rates

Instead of a single 1% fee, New Jersey now applies increasing rates to the entire sale price once the $1M threshold is crossed:

• $1M – $2M: 1%

• $2M – $2.5M: 2%

• $2.5M – $3M: 2.5%

• $3M – $3.5M: 3%

• Over $3.5M: 3.5%

This tax is in addition to the standard Realty Transfer Fee that sellers already pay.

Why This Matters for Sellers

If you’re selling a high-end home, this change can mean tens of thousands of dollars more in closing costs than under the old rules.

That makes pricing strategy, timing, and negotiation more important than ever. Overpricing a luxury home, missing the right buyer window, or mishandling contract terms can now have an even bigger financial impact.

What Buyers Should Know

While buyers are no longer the ones directly paying this tax, it still affects the transaction. Sellers may factor the cost into pricing, and negotiations at this level are more nuanced than ever.

This is exactly where professional guidance matters.

Transition Rules May Apply

If a contract was signed before the law took effect and closed within a specific window, different rules may apply. This is something that should be reviewed carefully with your real estate attorney and title company — not guessed at.

Why Experience Matters More Than Ever

High-value transactions require:

• Clear cost forecasting

• Smart pricing strategy

• Strong negotiation

• Coordination with attorneys, lenders, and title professionals

This isn’t the time for surprises at the closing table.

WHY STRESS?

Whether you’re selling, buying, or just planning ahead, my role is to eliminate uncertainty, explain the numbers clearly, and help you make confident decisions — especially as laws and markets change.

If you’re curious how these new rules affect your home value, net proceeds, or next move, let’s talk.

Peter Hunt
Century 21 Action Plus Realty
Your Trusted Advisor
WHY STRESS?