By Justin Liva, Mojo House BuyersYou may own a New Jersey house without living here anymore. Maybe you inherited a parent's place and live a few states away, or you moved and kept the old house as a rental. When it's time to sell, there's a rule to know early: New Jersey wants an estimated income tax payment before the deed can be recorded.
Below is how that works, drawn from the Division of Taxation's Technical Bulletin TB-57(R), revised in June 2026, and its FAQ on the GIT/REP forms. Your own tax picture is something to go over with an accountant who knows New Jersey returns.
Why the state collects tax at closing
Under N.J.S.A. 54A:8-8 through 8-10, a nonresident individual, estate or trust that sells New Jersey real property generally has to make an estimated Gross Income Tax payment before the deed is recorded. The Division's nonresident seller page says the payment is due whether or not the seller has a gain.
The county won't record the deed without the right form and any estimated payment due. That makes it a closing requirement, not something you can deal with next April.
How the payment is figured
The calculation has a floor. You take the gain you'd report for federal income tax purposes and multiply it by New Jersey's highest income tax rate for the year. The payment is the larger of that number or 2% of the consideration stated in the deed.
So 2% of the price is the minimum, not a cap. On a $400,000 sale, the floor is $8,000. If your gain is big enough that the top-rate calculation comes out higher, you pay the higher figure.
If you own the property with others, you calculate on your share. A nonresident who owns a quarter of the house uses a quarter of the gain and a quarter of the consideration.
Who counts as a nonresident
The FAQ defines a resident as someone who has, and intends to keep, a permanent home in New Jersey on or after the day of the transfer. Anyone who doesn't meet that test is a nonresident for these forms, and part-year residents are treated as nonresidents.
Citizenship doesn't decide it. A non-U.S. citizen living here can be a resident, and a U.S. citizen living in Pennsylvania is a nonresident. If you're in the middle of a move when you close, ask your attorney which side of the line you fall on.
The GIT/REP forms, one by one
In an ordinary sale, every seller signs one of these forms to record the deed, residents included. Here's what each does:
- GIT/REP-1, Nonresident Seller's Tax Declaration. The standard form when you owe the payment. You hand it to the settlement agent at closing with the estimated tax, and the agent files it with the deed.
- GIT/REP-2, Nonresident Seller's Tax Prepayment Receipt. For paying ahead of closing at one of the Division's Regional Information Centers. It's only valid once the Division stamps it with its raised seal, and you bring the stamped form to closing.
- GIT/REP-3, Seller's Residency Certification/Exemption. Used to claim that no payment is due. Residents check the first box. Nonresidents can use it too if another listed assurance fits.
- GIT/REP-4, Waiver of Seller's Filing Requirement. A request to the Division to waive the payment for a reason that isn't on the GIT/REP-3. It only works before the deed is recorded, and the Division recommends sending it at least 14 days before closing.
Reasons a nonresident may owe nothing at closing
Here are a few of the GIT/REP-3 assurances worth knowing:
- The house was your principal residence and the whole gain is excludable under section 121 of the Internal Revenue Code. If part of the gain isn't excludable, this box doesn't work.
- The total consideration is $1,000 or less.
- The settlement sheet shows you receive no net proceeds, for example when everything goes to pay off the bank.
- The seller is a corporation, partnership or LLC taxed as one of those.
Selling at a loss is handled differently. The bulletin says a seller with a capital loss has to request a waiver on the GIT/REP-4, with an itemized list of improvements if the loss comes from capital improvements.
Inherited houses and estates
I've helped many people sell inherited properties they didn't want, so this part is worth slowing down on. When an estate sells, the estate fills out the form based on its own residency, and the executors or administrators sign. If an heir has already received the house and sells it later, the heir uses the form that matches their own residency.
The FAQ adds that each unmarried co-owner, trustee, executor and beneficiary signs a separate form. A married couple filing a joint New Jersey return can sign one together. An executor who is also a beneficiary signs twice, once in each role. My inherited house guide covers the bigger decisions that come before any of this paperwork.
Getting an overpayment back
If the estimated payment turns out to be more than you owe, TB-57(R) gives two ways to recover the difference. You can claim the excess on your New Jersey nonresident return, Form NJ-1040NR, for the year of the sale. Or you can mail Form A-3128 with supporting documents for a faster refund, though you still have to file the NJ-1040NR.
The bulletin suggests the A-3128 makes the most sense when you sell early in the year and don't want to wait. A sale late in the year can simply be reconciled on the return. Keep your settlement statement, because the refund paperwork asks for proof.
How to keep it from slowing your closing
Tell your attorney or title company you're a nonresident on day one. If you need a waiver, it has to be approved before the deed is recorded. The FAQ suggests calling the Division's GIT/REP Unit at least two weeks before closing for complicated transactions, such as several sellers with mixed residency.
Sellers without a Social Security number can use an ITIN or attach a federal Form W-7 to the GIT/REP-1. The bulletin notes that prepaying for a stamped GIT/REP-2 may reduce delays in that situation.
None of this changes how I buy. If the house is still rented, I buy with tenants still living there, and if you're too far away to empty it, you can leave behind whatever you don't want because I handle the cleanout after the sale. I close on the seller's timeline, and the estimated payment is settled at closing alongside the Realty Transfer Fee. If you're selling because you've already moved, my notes on relocating or downsizing may help with timing. When you're ready, here's how my process works.