🏛️ What You Need to Know About New Jersey’s New Mansion Tax (2025 Update)

🏠 1. What Is the Mansion Tax — and What Just Changed?

Until recently, NJ’s mansion tax was a 1% flat fee on homes sold for $1 million or more, paid by the buyer. But as of July 10, 2025, that’s no longer the case.

Here’s what’s changed:

• Sellers are now responsible for paying the mansion tax

• The rate is now tiered, increasing based on the sale price:

This applies to residential, commercial, and mixed-use properties over $1 million.

📅 2. Timing Matters: Refund Window for Contracts Signed Before July 10

There’s a key transitional rule for contracts signed before July 10, 2025:

If your contract was fully signed prior to July 10 and your deed is recorded by November 15, 2025, the seller can apply for a refund of the amount above the original 1%.

✅ But: The refund request must be submitted within 12 months of closing — so timing is critical.

💸 3. What Sellers Need to Know

If you're selling a luxury home in New Jersey, here's how this change affects you:

• Lower net proceeds — a $3.5M sale could now mean $122,500+ in combined taxes and fees

• New pricing strategies — expect some sellers to price just below tax thresholds (e.g., $2.49M or $2.99M) to avoid a higher bracket

• Less flexibility — sellers may push back on repair requests or concessions, given the higher closing costs

🔍 4. What Buyers Should Expect

Good news: buyers no longer pay the mansion tax.

But that doesn’t mean it’s a free ride:

• Sellers may pass the cost along through tougher negotiations

• Limited flexibility in high-demand towns like Hoboken, Montclair, Tenafly, Closter, Alpine, Saddle River and a few more. 

• Expect more “psychological pricing” — think $2.499M homes that avoid the 2% jump

📈 5. Why This Matters for Luxury Listings

If you’re listing or buying a property over $1M in NJ, this law changes how deals are structured:

• You need to recalculate your net proceeds

• Carefully time contract and deed recording dates

• Strategically price homes around tier breaks

• Make sure your agent, attorney, and title team are up to speed

• 📍 Towns Most Affected by the New Mansion Tax

  Luxury markets in Northern New Jersey likely to be directly impacted by the new tiered mansion tax include:

  • Alpine

  • Saddle River

  • Englewood Cliffs

  • Tenafly

  • Demarest

  • Franklin Lakes

  • Short Hills

  • Montclair

  • North Caldwell

  • Edgewater

  • And luxury homes anywhere in New Jersey

🤝 Let’s Talk Strategy

Whether you're buying or selling, navigating these changes requires more than just price awareness — it takes strategy, timing, and expert representation.

📩 Email: [email protected]
📞 Call/Text: 973-951-8205
📲 Follow: @HudsonHomesandBeyond

Let’s structure your next deal for maximum confidence — and minimum surprises.