Full question:
We've had our NJ property that -was- our Primary residence from 6/2000 to 1/2008 for sale since 2007. To begin establishing a client base at our home in PA we made that our new Primary residence Jan.2008 when the NJ property finally sells is there any unexpected additional taxes NJ is gonna hit us with besides the current Real Estate Transfer tax since we now live out of NJ (but did reside in the NJ home for 4 of the last 5 years? I think the NJ Realty Transfer tax is 1% right? Do we as the Sellers pay that or does the Buyer or 50/50?
- Category: Real Property
- Date:
- State: Pennsylvania
Answer:
When selling residential real estate in New Jersey, sellers must pay a Realty Transfer Fee, which is a tax imposed by the state (N.J.S.A. 46:15-5 et seq.). This fee can be significant and is calculated on a sliding scale based on the sales price of the property:
- $500.00 to $350,000.00: $2.00 to $2,105.00
- $350,000.00 to $1 million: $2,105.00 to $9,575.00
- $1 million to $2 million: $9,575.00 to $21,675.00
- Above $2 million: $6.05 per $500.00
There are reduced fees for certain groups, such as senior citizens and disabled persons, and some transfers may be exempt from this fee.
Additionally, as a non-resident seller, you will need to file an estimated Gross Income Tax on the sale. This estimated payment is based on your gain from the sale, calculated at the highest Gross Income tax rate of 8.97%, or a minimum of 2% of the sales price.
The buyer may also be subject to a Mansion Tax if the sale price exceeds $1 million, which is 1% of the purchase price.
In summary, as the seller, you are responsible for the Realty Transfer Fee and the estimated Gross Income Tax, while the buyer pays the Mansion Tax if applicable.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.