How much is the transfer tax in New Jersey?
New Jersey calls its transfer tax the Realty Transfer Fee, or RTF, and the county clerk collects it when the deed is recorded. The rate works like income tax brackets: each slice of the price is charged at its own rate per $500. Once the total price is over $350,000, which covers virtually every apartment building, the Division of Taxation’s schedule is the one in the table below.
Because the tiers are marginal, the effective rate climbs slowly with price. It works out to about 1.08% at $2,000,000 and 1.16% at $5,000,000. Sales of $350,000 or less use a lower schedule starting at $2.00 per $500, and qualifying senior, blind, disabled and low- and moderate-income housing sellers get reduced rates.
| Slice of the price | Rate per $500 | As a percent |
|---|---|---|
| First $150,000 | $2.90 | 0.58% |
| $150,000 to $200,000 | $4.25 | 0.85% |
| $200,000 to $550,000 | $4.80 | 0.96% |
| $550,000 to $850,000 | $5.30 | 1.06% |
| $850,000 to $1,000,000 | $5.80 | 1.16% |
| Over $1,000,000 | $6.05 | 1.21% |
Who pays the Realty Transfer Fee?
The seller. The Division of Taxation states that the seller is legally responsible for both the Realty Transfer Fee and the graduated percent fee.
A contract can still move the economics. A buyer who wants the deal badly may credit some of the fee back, but the state looks to the seller, and the county clerk won’t record the deed until the fee is paid. County clerks set the payment mechanics; Sussex County’s clerk, for example, requires payment through an attorney trust account and bank-certified funds once fees reach $10,000.
The 2025 change: the mansion tax became a seller-paid graduated fee
Until mid-2025, New Jersey charged a 1% “mansion tax” on certain deeds over $1 million, paid by the buyer. P.L. 2025, c. 69, signed June 30, 2025 and effective July 10, 2025, rewrote it in N.J.S.A. 46:15-7.2. The fee is now called the graduated percent fee, it’s imposed on the grantor (the seller), and the rate rises with price.
The percentage applies to the entire consideration, not just the part above each threshold. A $2,750,000 transfer falls in the 2.5% tier, so the fee is $68,750 on top of the regular RTF. Deeds over $1 million must include Form RTF-1EE, the affidavit for the graduated percent fee, and so must every commercial property transfer.
- Over $1,000,000 up to $2,000,000: 1%
- Over $2,000,000 up to $2,500,000: 2%
- Over $2,500,000 up to $3,000,000: 2.5%
- Over $3,000,000 up to $3,500,000: 3%
- Over $3,500,000: 3.5%
Why most apartment buildings aren’t hit by the graduated fee
The graduated percent fee only applies to certain property classes: Class 2 residential, Class 3A farms with a residential building, cooperative units and Class 4A commercial property. The Division of Taxation spells out that Class 4A here excludes industrial and apartment property.
Apartment buildings are their own class. N.J.A.C. 18:12-2.2 defines Class 4C as “apartments designed for the use and enjoyment of five families or more.” Class 4C isn’t on the list in 46:15-7.2, and the Tax Court said of the earlier 1% version in Ridgewood Commons Group v. Director that Class 4C apartment properties “are not included” among the classes subject to it. So a typical 5+ unit building pays the regular RTF only.
Check your classification before you price a deal. A building with four or fewer units is generally Class 2 residential, and a mixed-use building the assessor has put in Class 4A commercial would be covered. The class is shown on your tax bill and the municipal tax list. If it’s wrong, deal with it before closing, not at the recording window.
Selling the entity: the controlling interest transfer tax
New Jersey also taxes the sale of a controlling interest in an entity, but only where the entity owns Class 4A commercial property. Under N.J.S.A. 54:15C-1 as amended in 2025, a sale for more than $1,000,000 of more than 50% of a corporation’s voting power, or more than 50% of the beneficial ownership of a partnership or LLC, is taxed at the same 1% to 3.5% tiers, and the seller now pays.
Class 4C apartments aren’t in that definition either. And because the RTF is a fee on recorded deeds, selling the membership interests of an LLC that owns an apartment building generally doesn’t trigger it. Moving the building between entities is another matter: the Division’s FAQ says there is no exemption for conveying from one legal entity to another, and the fee base includes the value of stock or capital contributions involved.
Exemptions from the Realty Transfer Fee
The Division of Taxation lists 17 full exemptions, claimed on Form RTF-1. These are the ones investors meet most often:
- Deeds for consideration under $100.
- Deeds that only provide or release security for a debt.
- Deeds that confirm or correct a deed already recorded.
- Deeds between spouses, or between parent and child.
- Deeds by an executor or administrator distributing an estate under a will or intestacy law.
- Deeds from a sale for delinquent taxes, deeds on partition and deeds by a receiver, bankruptcy trustee or assignee for creditors.
- Deeds carrying out a final judgment for specific performance.
What isn’t exempt: 1031 exchanges, entity moves and sheriff’s sales
There’s no RTF exemption for a 1031 exchange. The deed for your relinquished New Jersey property carries the full fee, paid by you as seller. If your replacement property is in New Jersey, its seller pays the fee on that deed.
Sheriff’s deeds aren’t exempt either; they’re filed with Form RTF-8, the affidavit of consideration for sheriff’s deeds. And as noted, a deed from one entity to another, even between related entities, has no blanket exemption.
Worked example: a $2,000,000 and a $5,000,000 New Jersey apartment sale
Take a 24-unit Class 4C building in Union County selling for $2,000,000. The RTF is figured slice by slice: $870 on the first $150,000, $425 on the next $50,000, $3,360 on $200,000 to $550,000, $3,180 on $550,000 to $850,000, $1,740 on $850,000 to $1,000,000 and $12,100 on the last $1,000,000. Total: $21,675, paid by the seller. No graduated percent fee applies.
At $5,000,000, the first five slices are the same $9,575 and the $4,000,000 above $1 million adds $48,400, for $57,975. If the same $5,000,000 property were a Class 4A commercial building, the 3.5% graduated fee would add $175,000, for a seller total of $232,975. The class code is worth $175,000 on that deal.
| Line item | $2,000,000 apartment (4C) | $5,000,000 apartment (4C) |
|---|---|---|
| Realty Transfer Fee, all tiers | $21,675 | $57,975 |
| Graduated percent fee | $0 (Class 4C) | $0 (Class 4C) |
| City or county add-on | $0 | $0 |
| Seller total | $21,675 | $57,975 |
| Same price if classed 4A commercial | $41,675 | $232,975 |
Two more closing items: nonresident sellers and bulk sale notice
If you’re a nonresident individual, estate or trust, New Jersey requires an estimated Gross Income Tax payment before the deed records. Under N.J.S.A. 54A:8-8 through 8-10 and Division guidance, the payment is the gain times the top rate, 10.75%, but not less than 2% of the price. On a $2,000,000 sale, that’s a minimum $40,000 held toward your New Jersey return. Forms GIT/REP-3 and GIT/REP-4 cover exemptions and waivers.
Business sellers also run into the bulk sale rule in N.J.S.A. 54:50-38. The buyer must send Form C-9600 and the signed contract to the Division at least 10 business days before closing, and the Division can require part of your proceeds to be held in escrow for any state taxes you owe. The exclusion for one- and two-family homes owned by individuals doesn’t cover apartment buildings, so build those 10 days into your timeline.
New Jersey compared with neighboring states
For an apartment building, New Jersey’s RTF sits between New York’s state rate and Pennsylvania’s combined rate. The comparison shifts for commercial property over $1 million, where New Jersey’s graduated fee makes it far more expensive.
| State | Rate on a deed | $2,000,000 sale |
|---|---|---|
| New Jersey (Class 4C apartment) | Tiered RTF, 0.58%–1.21% per slice | $21,675 |
| New York (state tax only) | $2 per $500 (0.4%) | $8,000 |
| Pennsylvania | 1% state, plus local tax of usually 1% or more | $20,000 state; about $40,000 with 1% local |
How the RTF fits into your total selling costs
At roughly 1.1% of price, the RTF is a real cost, but income tax is usually bigger. New Jersey taxes the gain through its Gross Income Tax, federal capital gains tax applies, and depreciation is recaptured at up to 25% as unrecaptured Section 1250 gain. A 1031 exchange defers the federal and, in most cases, the New Jersey tax on the gain, while the RTF on the deed is still owed.
Seller financing can spread your gain over several years. Run the numbers with your CPA and closing attorney, and get your class code confirmed, before you set the price you need to net.
Selling your New Jersey apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units throughout New Jersey as a direct buyer. We can offer seller-carry terms and we work inside 1031 exchange timelines, including the 10-business-day bulk sale notice.
Send the property address and unit count through the form on this page or call (469) 660-2977. We typically respond within 48 hours, and our offer will show how the RTF and any other seller costs fall at closing.
