Selling a House in NJ and Moving Out of State

Moving truck on the highway after selling a house in NJ and moving out of state

Short answer: If you are a nonresident of New Jersey when you sell, the state generally requires an estimated income tax payment at closing, often called the “exit tax.” Many sellers owe nothing extra because they qualify for an exemption, such as the principal residence exclusion. Your attorney handles the paperwork on Form GIT/REP.

Resident or nonresident at closing?

Your residency on the closing date matters. A New Jersey resident completes a form certifying residency and makes no estimated payment at closing. A seller who has already moved and become a resident of another state is generally treated as a nonresident.

How the nonresident payment works

  • The estimated payment is based on the sale price or the gain, using rates set by the state. Your attorney calculates it on Form GIT/REP-1.
  • It is a prepayment, not an extra tax. You settle up when you file your New Jersey nonresident return.
  • If you overpay, you can request an early refund using Form A-3128 with proof such as your settlement statement.

Common exemptions

Nonresident sellers can file Form GIT/REP-3 instead of paying when an exemption applies. One is the principal residence exclusion: if you owned and lived in the home for at least two of the last five years, up to $250,000 of gain, or $500,000 for married couples, is excluded. See capital gains tax when selling a home in NJ.

Timing your move

  1. Sell first, then move if you want to show the home furnished and close as a resident.
  2. Move first if you need to start a job; your agent can manage showings and a vacant home.
  3. Use a rent-back to close and stay a few weeks while you finish the move.

Selling from a distance

The MorrisAgent Team handles staging, photos, showings, inspections and the New Jersey smoke cert while you are away. Closings can often be completed remotely or by power of attorney, arranged through your attorney.

See every other cost in NJ seller closing costs and check what your home is worth.

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

Do I have to pay tax when selling a house in NJ and moving out of state?

Nonresident sellers generally make an estimated income tax payment at closing unless an exemption applies, such as the principal residence exclusion.

What is the NJ exit tax?

It is a nickname for the estimated Gross Income Tax payment nonresident sellers make at closing on Form GIT/REP-1. It is a prepayment credited on your NJ nonresident return.

Can I get the NJ exit tax refunded?

If you overpay, you can request an early refund with Form A-3128, or settle up on your NJ nonresident return.

Sources

Talk to the MorrisAgent Team

Leaving New Jersey and need to sell? Call (973) 200-4800, email [email protected], or stop by our office at 518 Main Street, Suite 102, Boonton. No pressure, and no surprises.