Short answer: The NJ mansion tax, now officially the Graduated Percent Fee, is paid by the seller on sales over $1 million. It ranges from 1% to 3.5% of the entire sale price and is added on top of the Realty Transfer Fee.
The change took effect for deeds submitted on or after July 10, 2025. Before then, buyers paid a flat 1%.
2026 mansion tax rates
| Sale price | Rate (on the whole price) |
|---|---|
| $1,000,000 or less | None |
| $1,000,001 to $2,000,000 | 1% |
| $2,000,001 to $2,500,000 | 2% |
| $2,500,001 to $3,000,000 | 2.5% |
| $3,000,001 to $3,500,000 | 3% |
| Over $3,500,000 | 3.5% |
Mansion tax examples
- $1,200,000 sale: 1% = $12,000, plus a Realty Transfer Fee of about $11,995.
- $2,750,000 sale: 2.5% = $68,750.
- $1,000,000 sale: no mansion tax at all.
Because the rate applies to the whole price, crossing a threshold by one dollar can cost thousands. That is worth knowing when you set a list price or weigh an offer.
Why it matters in Morris County
The Morris County single-family median sale price hit $850,000 in May 2026, up 11.1% from a year earlier, according to NJ REALTORS. In towns like Chatham, Mountain Lakes, Madison and Florham Park, many homes now sell above $1 million, so more sellers pay this fee than ever before.
Can the buyer pay it instead?
The law makes the seller liable. The state does not get involved in contract terms where the parties agree to shift the cost, so that is a negotiation point for your attorney during attorney review.
Are there exemptions?
Unlike the Realty Transfer Fee, the mansion tax has no reduced rate for seniors or disabled sellers. Ask your attorney whether any statutory exemption fits your transfer.
Is the mansion tax being repealed?
A bill introduced in January 2026 (S964) would eliminate several realty transfer fees, including this one. As of November 2026 it had not been enacted, so the current rates apply.
See all costs together in our guide to NJ seller closing costs. Selling a high-end home? Read why sellers choose us for luxury home sales.
This article is general information, not legal or tax advice. Rules change and can vary by town, so confirm details with your attorney, accountant or the agency named before you act.
Frequently asked questions
Who pays the mansion tax in NJ?
The seller, for deeds submitted on or after July 10, 2025.
What is the NJ mansion tax rate?
1% on sales from $1,000,001 to $2 million, rising to 2%, 2.5%, 3% and 3.5% above $3.5 million, applied to the whole price.
Is the mansion tax in addition to the realty transfer fee?
Yes. It is a separate fee charged on top of the Realty Transfer Fee.
Do seniors get a mansion tax exemption?
No. The reduced rates for seniors and disabled sellers apply to the Realty Transfer Fee, not the mansion tax.
Sources
- NJ Division of Taxation: Graduated Percent Fee notice
- NJ Division of Taxation: Realty Transfer Fee FAQs
- NJ REALTORS: Morris County market update, May 2026
Talk to the MorrisAgent Team
Selling a home near or above $1 million? Call (973) 200-4800, email [email protected], or stop by our office at 518 Main Street, Suite 102, Boonton. No pressure, and no surprises.