A. New Jerseyans complain a lot about taxes while they’re living here, and yes, they complain on the way out, too.
The tax you’re talking about is officially known as the Realty Transfer Fee (RTF). This state-imposed fee was established in 1968 to offset the costs of tracking real estate transactions.
“People call it a `tax’ because that is what this once insignificant charge has turned into after nearly 43 years of steady increases,” said Alan Meckler, a certified financial planner with Cornerstone Financial Group in Succasunna. “Home sellers pay the tax, which is based on a home’s sales price.”
The fee schedule can be found on the state’s Division of Taxation web site (state.nj.us/treasury/taxation), and a Google search will yield many online calculators to help you calculate the tax.
To give you an idea, a home sold for $550,000 would mean a $4,655 Realty Transfer Fee.
“Different rates apply if the property sold is less than or greater than $350,000,” said Robert Bacino of Insight Financial Services in Flemington. “There is also a partial exemption to the tax based on certain situations–to senior citizens who are defined as individuals age 62 or older, to blind persons, to disabled persons, and on property that is low and moderate income housing.”
A complete listing of exemptions and rules can be found at N.J.S.A. 46:15-10.
In order to qualify for the exemption, a fully completed and notarized "Affidavit of Consideration for Use by Seller" (form RTF-1) must be annexed to and recorded with such deeds, attesting to the facts surrounding the partial exemption claim, Bacino said.
Some more examples of the amount of tax due? Bacino said the seller of a $325,000 home can expect to pay approximately $1,910 without the benefit of any partial exemptions. A property sold by a senior citizen for $280,000 with a partial exemption would mean a fee of approximately $475.
To make sure you have the right expectations for the fee (okay, tax) on the sale of your home, talk to your tax professional and your real estate pro..
E-mail your questions to askbiz@starledger.com.
If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement and agree that your clicks, interactions, and personal information may be collected, recorded, and/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.
Cookie Settings
Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement, (updated 8/1/2024) and acknowledgement of our Privacy Policy, and Your Privacy Choices and Rights (updated 7/1/2024).
© 2024 Advance Local Media LLC. All rights reserved (About Us).
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Advance Local.
Community Rules apply to all content you upload or otherwise submit to this site.
YouTube's privacy policy is available here and YouTube's terms of service is available here.