Tax Tip #265

NJ imposes a Realty Transfer Fee (RTF) on the seller of real property when recording a deed for the sale. The RTF is usually calculated based on the amount of consideration recited in the deed. 

Rates vary depending on the sale price:

• More than $1 million and up to $2 million — 1 percent
• More than $2 million and up to $2.5 million — 2 percent
• More than $2.5 million and up to $3M — 2.5 percent
• More than $3 million and up to $3.5 million — 3 percent
• More than $3.5 million — 3.5 percent

For example, a seller sells NJ property for $2.9 million. The cost of home plus improvements is $1 million. RTF is $72,500 (2.9 million * 2.5%. The taxable gain is $1,827,500 (2.9 million -72,500 -1 million).