By Justin Liva, Mojo House BuyersIf you're adding up what you'll net from a sale, the mortgage payoff and any agent commission are the obvious subtractions. The Realty Transfer Fee is easier to miss. New Jersey charges it to the seller for recording the deed that hands the house to the buyer, and because it's figured on the price, it grows as the price does.
Here's how it works, based on what the NJ Division of Taxation publishes. I'm a buyer, not a tax professional, so treat this as orientation and let your closing attorney run the exact figure.
The seller pays it, and it's due when the deed is recorded
The state imposes the Realty Transfer Fee (people call it the RTF) on the seller when the deed is recorded. It applies to every transfer of title to New Jersey real property unless the deed fits one of the exemptions the law lists.
The fee is based on the consideration stated in the deed, which in plain terms is the price. In certain cases the state uses the property's assessed value divided by the Director's Ratio instead. The fee gets collected through the county recording officer as part of recording the deed.
If you claim a full or partial exemption, an affidavit called Form RTF-1 has to be filed with the deed.
How the base fee is calculated
The base fee is charged per $500 of consideration, in brackets. The rate per $500 steps up as the price moves into higher brackets, and there are two separate schedules: one for sales of $350,000 or less and one for sales above that. Sales above $350,000 pay a higher rate in every bracket.
I'm not going to reprint the rate table here, because the state can change it and a stale table does more harm than good. The current brackets are published on the Division's Realty Transfer Fee page, with separate tables for each price range and for the reduced rate. Your attorney can run your contract price through the right one.
The graduated percent fee on sales over $1 million
Until July 10, 2025, New Jersey charged a 1% fee on certain sales above $1 million, and it fell on the buyer. You may have heard it called the mansion tax.
That changed with P.L.2025, c.69, which took effect on July 10, 2025. According to the Division of Taxation's notice, the old 1% fee became a Graduated Percent Fee, and the legal responsibility for it moved from the buyer to the seller. The rates are:
- More than $1,000,000 up to $2,000,000: 1% of the total price
- More than $2,000,000 up to $2,500,000: 2%
- More than $2,500,000 up to $3,000,000: 2.5%
- More than $3,000,000 up to $3,500,000: 3%
- More than $3,500,000: 3.5%
The key detail is that the percentage applies to the whole price, not just the part above $1 million. The Division's own example: a $2.75 million sale owes 2.5% of $2.75 million, which is $68,750, on top of the regular transfer fee.
The graduated fee applies to residential property (Class 2), farms with a residential building (Class 3A), commercial property in Class 4A (other than industrial property and apartment buildings) and cooperative units (Class 4C). A separate affidavit, Form RTF-1EE, has to go with every deed over $1 million.
If your house is anywhere near that price, this fee alone can move your net by tens of thousands of dollars, so ask about it before you agree to a number.
Reduced rates for seniors, blind or disabled sellers, and affordable housing
New Jersey offers a partial exemption that lowers the fee for some sellers. Per the RTF-1 affidavit, it covers sellers who are 62 or older, legally blind, or permanently and totally disabled and receiving disability payments. To qualify, the seller also has to:
- Own and live in the home at the time of sale
- Be a New Jersey resident
- Be selling a one- or two-family home
If the owners hold title as joint tenants, every owner has to qualify. A married couple or civil union couple holding title as tenants by the entirety only needs one of them to qualify. Housing that meets the state's low- and moderate-income requirements also gets the reduced rate.
If you're over 62 and still living in the house you're selling, mention it to your attorney early so the reduced rate is claimed on the affidavit.
Transfers that owe nothing
Some deeds are fully exempt. The Division's list includes deeds for less than $100, deeds between spouses or between a parent and child, and deeds recorded within 90 days after a divorce decree between the former spouses. It also covers a deed from an executor or administrator to an heir that distributes the estate under the will or the intestacy laws.
Read that last one carefully. The exemption describes handing the house to an heir. A sale by the estate to an outside buyer is a different kind of transfer, so ask the estate's lawyer how the fee applies before you assume it's waived. My probate sale guide covers the rest of that process.
What your contract says versus what the law says
After the 2025 change, the Division issued a clarification memo stating that the statutes put legal responsibility for the transfer fees on the seller. If a contract shifts the cost to the other side, the Division treats that as a private arrangement between the parties and won't interpret it for you.
That lines up with how I work. Who covers closing costs depends on the deal. Sometimes I pay them, sometimes the seller does, and the contract should say which. You can see how that fits into the rest of the costs in my guide to seller closing costs.
A few practical tips
Ask for a net sheet that lists the transfer fee as its own line. A vague "closing costs" figure hides it.
If you've moved out of state, the transfer fee isn't the only thing collected at recording. Nonresident sellers may owe an estimated income tax payment too, which I explain in selling New Jersey property as a nonresident.
Your attorney is the right person to confirm exemptions, the exact fee and anything unusual about your deed. The transfer fee shows up at the end of the process, and my step-by-step sale guide shows where it lands.
If you'd like a number to compare against a listing, you can request a no-obligation cash offer and ask how the closing costs would be divided on your sale.