What NJ’s 2025 Transfer-Fee Changes Mean for Shore Sellers

The short version: since mid-2025, New Jersey’s supplemental transfer fees on sales above $1 million (what everyone still calls the “mansion tax”) are paid by the seller, not the buyer, and the rates are now graduated, climbing with the sale price instead of sitting at a flat 1%. The law (A5804/S4666) was signed June 30, 2025 and applies to transfers after July 10, 2025. A year on, this is settled, fully-in-effect law. At shore price points, where seven-figure sales are ordinary, it moved a meaningful line item from the buyer’s side of the closing statement to yours.

Our guide to the full cost of selling at the shore covers every closing cost in one place; this post goes deep on this change alone: what the law did, how it works, and what it means when you price a shore home in 2026.

What the 2025 law actually changed

Before July 2025, a home sale’s transfer-tax picture had two parts: the seller paid the standard realty transfer fee (the tiered fee on every deed), and the buyer paid a flat 1% supplemental fee on residential purchases over $1 million.

The 2025 law changed the second part in two ways:

1. Who pays. The supplemental fee on $1M+ sales shifted from the buyer (grantee) to the seller (grantor). It’s collected from the seller’s side at recording, alongside the standard realty transfer fee sellers already paid.
2. How much. The flat 1% became a graduated schedule: the rate starts at 1% for sales just over the $1 million threshold and steps up with price, topping out at 3.5% for sales above $3.5 million. Critically, whatever rate applies is charged on the entire sale price, not just the portion above a threshold.

Two boundaries worth knowing. The standard realty transfer fee itself didn’t change: its brackets and reduced-rate categories for qualifying sellers work the way they always have. And the regime reaches beyond single-family homes, covering certain other property classes and controlling-interest transfers. Entity-owned shore properties need the same conversation.

A short transition window protected deals already under contract when the rules flipped; it closed in late 2025. Every shore closing today runs under the new rules.

Why this lands harder at the shore than almost anywhere

A threshold that reads as a “mansion tax” in most of New Jersey reads as a “typical single-family sale” on the barrier islands. In markets like Avalon and Stone Harbor, median prices sit well above $1 million. There, the supplemental fee isn’t an edge case; it’s the default. Across the other island markets, plenty of single-family and new-construction sales cross $1 million even where the median doesn’t.

The practical translation for shore sellers:

• Below $1 million: nothing changed. There’s no supplemental fee, just the standard realty transfer fee as before.
• Just above $1 million: a cost that used to be your buyer’s problem is now yours, at the same 1% rate the buyer used to pay.
• Well above $1 million: you both inherited the fee and face higher graduated rates than the old flat 1%, on the entire price. This is where the law bites hardest, exactly where the shore’s upper markets transact.

The effect on your walk-away number: a full percentage point or more of the entire sale price, on top of the standard transfer fee and your commission. At shore prices the transfer-fee stack now runs a serious second to commission, sharpening the case for scrutinizing the one big line item that is negotiable. Our savings calculator shows the comparison on your own numbers.

The threshold cliff: why pricing near a breakpoint matters

Because each graduated rate applies to the whole consideration, crossing a threshold raises the fee on every dollar of the price, not just the dollars above the line. That creates a real pricing dynamic:

• Contract prices that land barely above a breakpoint deserve a hard look: sometimes a modestly lower price nets the seller more after the fee.
• Negotiations near a threshold have a number both sides can see. Model your net at prices on either side of the line before countering.
• What counts as “consideration” is a legal question with real money attached near a breakpoint, one more reason your attorney should see the deal structure early.

None of this calls for anything clever, just running your net-proceeds math with the fee schedule in it before you set an asking price, not after you’re under contract. A pricing conversation grounded in actual closed sales, with the thresholds on the table, is what a proper valuation is for at these price points.

What shore sellers should do with this in 2026

Three habits, one year into the new regime:

1. Budget it from day one. If your home will sell above $1 million, the supplemental fee belongs in your net-proceeds estimate at the same moment commission does, not as a surprise on the settlement statement.
2. Ignore stale advice. Plenty of older articles and boilerplate contract language still describe the 1% fee as a buyer cost; under current law it’s the seller’s. If a document in your deal says otherwise, flag it during attorney review.
3. Know your rate band before you price. Have your attorney or broker confirm the current schedule against your target range, especially near a threshold. The rates are statutory and public; the strategy is where your price lands against them.

FAQ

Who pays the NJ mansion tax now: buyer or seller?
The seller. Since New Jersey’s 2025 law (A5804/S4666, signed June 30, 2025, applying to transfers after July 10, 2025), the supplemental fees on sales above $1 million are paid by the seller, alongside the standard realty transfer fee sellers already paid.

How much is the supplemental fee on a $1M+ sale?
It’s graduated: rates start at 1% for sales just over $1 million and step up with price to 3.5% above $3.5 million, and each rate applies to the entire sale price, not just the amount over the threshold. Confirm the exact schedule for your price range with your attorney.

Did the regular NJ realty transfer fee change in 2025?
No. The standard tiered fee sellers pay on every deed (including its reduced-rate categories) didn’t change. What changed is who pays the supplemental fees above $1 million, and how steeply they climb.

Does the seller-paid fee apply if my shore home sells for under $1 million?
No. Below $1 million there is no supplemental fee, only the standard realty transfer fee, which sellers have always paid. The 2025 changes only affect sales that cross that threshold.

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General information, not legal or tax advice. Statutory rates and thresholds are set by the State of New Jersey; confirm current figures for your transaction with your attorney.