
Scott H. Novak
Partner
201-896-7240 snovak@sh-law.comClient Alert
Author: Scott H. Novak
Date: August 7, 2025
Partner
201-896-7240 snovak@sh-law.comNew Jersey recently made changes to what is known as the Mansion Tax. New Jersey imposes an additional tax on the transfer of certain types of real estate when the sales price exceeds $1 million. Until recently, that tax was 1%. Under new legislation, that tax is now between 1% and 3.5%, depending on the sales price.
Owners of Class 4A commercial real estate have not been able to escape this tax by transferring an entity that owns real estate rather than the real estate itself. Instead of being called the Mansion Tax, this tax is called the Controlling Interest Transfer Tax (CITT).
The new bill (P.L. 2025, c. 69) adds four more tiers as follows:
Sale Price | CITT |
---|---|
$1 million to $2 million | 1.0% |
Over $2 million to $2.5 million | 2.0% |
Over $2.5 million to $3 million | 2.5% |
Over $3 million to $3.5 million | 3.0% |
Over $3.5 million | 3.5% |
The new law makes it clear that the tax is imposed on the seller of the property. The new tax applies to real estate contracts executed on or after July 10, 2025. For the tax NOT to apply, the contract would have had to have been executed before July 10, 2025, AND the deed must be recorded prior to November 15, 2025.
These rules apply to Class 4A commercial property owned by an entity. There are more rules and details that may have to be considered, depending on the nature of your transaction.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
New Jersey recently made changes to what is known as the Mansion Tax. New Jersey imposes an additional tax on the transfer of certain types of real estate when the sales price exceeds $1 million. Until recently, that tax was 1%. Under new legislation, that tax is now between 1% and 3.5%, depending on the […]
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No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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