![]() It also does not apply to transactions made by or for federal agencies acting within the state of New Jersey, including institutions, agencies, the government itself, or any established subdivision of those authorities. However, this exemption isn't all that useful as most real estate transactions will have a much higher dollar value. If the consideration is valued at less than $100, the NJ Realty Transfer fee will not apply. hash-mark Exemptions To the NJ Realty Transfer Fee 1. Visit an official county recording portal to determine the total amount of the transfer fee(s) based on the value of your transaction. Add another 1% to transactions worth more than $1 million. To determine the transfer fee, calculate 1% of the total value of the consideration. hash-mark How To Calculate the NJ Realty Transfer Fee In that case, the land would not be subject to the tax. For example, functional farmland can be purchased without any structures or buildings on the property. Industrial complexes and facilities may not be taxed if the property itself doesn’t pull in an income even if a profit-making organization owns them.įinally, Class 3A farming properties have to pay the transfer fee, but some exemptions apply. This includes any establishment with customers or services, including malls, offices, restaurants, stores, and theaters. They are also subject to the realty transfer tax. Residential condominiums, however, have to pay it.Ĭlass 4A commercial properties are any that produce an income directly off of the land. This means that apartment complexes that fit more than four families are exempt from the tax (they are classified as 4C). It can be designed for function or enjoyment, but homes of all sizes fall into this category and are subject to the NJ realty transfer fee upon transfer of the deed. Knowing the differences will help you understand if your purchase applies and whether you should prepare to pay the NJ realty transfer fee.Ĭlass 2 residential properties refer to land that has a house on it. It applies to Class 4A commercial properties, Class 2 residential properties, and Class 3A farm properties, with certain exceptions. The NJ real estate transfer tax is payable by the buyer upon transfer of the deed. hash-mark Who Pays the NJ Real Estate Transfer Tax? The money collected for the transfer tax is deposited with the state treasurer ten days after it is received. ![]() All twenty-one New Jersey counties share the same rules and procedures for the realty transfer fee. The director’s ratio exists so that the realty transfer fee will always represent the true value of the transaction. This is simply to prevent transactions that purposely avoid the NJ Realty Transfer Tax by selling property cheaply on paper (thus, paying less in fees) and compensating the seller at a later time. Sometimes, the amount can be changed if the director’s ratio (this is the difference between the market value vs assessed value of property in a New Jersey district, determined by the Division of Taxation) differs significantly from the purchase being conveyed. The amount paid depends on the value of the property whose titles are being transferred. For homes that sell for under $150,000 the NJ transfer tax is only 0.4%, but for homes above $1 million, it is around 1%, depending on the exact sale price. It is calculated, paid, and recorded at the same time that the deed is recorded and is typically between 0.4% to 1% of the transaction’s value. The New Jersey Realty Transfer Fee is a transfer tax that is paid when the title of a property in NJ changes hands. What Is the NJ Realty Transfer Fee (Tax)? Who Pays the NJ Real Estate Transfer Tax? How To Calculate the NJ Realty Transfer Fee Exemptions To the NJ Realty Transfer Fee NJ Realty Transfer Fee & the Mansion Tax NJ Realty Transfer Fee Bottom Line hash-mark What Is the NJ Realty Transfer Fee (Tax)? ![]() Since this fee is a huge part of making property transfers in the state of New Jersey, it’s imperative for anyone planning to buy or sell a house to know what it is, how to calculate it, and who has to pay it. ![]() It’s also a big moneymaker for the state. The purpose of the NJ real estate transfer fee is to offset costs related to tracking and cataloging the state’s real estate deals each year. Use this short guide to figure out how much you should plan on paying on your purchase in NJ transfer taxes. The New Jersey Realty Transfer Fee has been around since 1968.
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