Selling a $1,000,000+ Home in Bergen County? What to Know About New Jersey’s Mansion Tax

Selling a $1,000,000+ Home in Bergen County? What to Know About New Jersey’s Mansion Tax

If you’re selling a $1,000,000-plus home in Bergen County, New Jersey, you’ve likely heard about the New Jersey “mansion tax”—and if you haven’t, you’re certainly not alone. This one-time tax often catches sellers off guard when it isn’t factored into the plan early on.

Below, we’ll break down what the mansion tax is, how it differs from the Realty Transfer Fee, who typically pays each cost, and how to plan ahead so there are no surprises at the closing table.

Let’s dive in.

What Is the New Jersey Mansion Tax?

New Jersey imposes a one-time tax on the sale of residential properties with a purchase price of $1,000,000 or more. The tax is calculated based on the agreed sale price, not the appraised value, and is paid at closing from the seller’s proceeds (unless otherwise negotiated).

The mansion tax is assessed on a graduated scale:

• $1,000,000 – $2,000,000 → 1% of the purchase price

• $2,000,001 – $2,500,000 → 2% of the purchase price

• $2,500,001 – $3,000,000 → 2.5% of the purchase price

• $3,000,000 – $3,500,000 → 3% of the purchase price

• $3,500,001 and up → 3.5% of the purchase price

This tax is commonly referred to as the “mansion tax,” but it applies regardless of whether the home is a traditional mansion or simply priced above the threshold.

How the Mansion Tax Differs From the Realty Transfer Fee

The mansion tax is separate from New Jersey’s Realty Transfer Fee (RTF).

The RTF is a state-imposed fee calculated on its own graduated schedule and applies to most real estate transactions, regardless of price. Traditionally, the seller pays the Realty Transfer Fee, and that custom still generally holds.

As of July 10, 2025, however, an important change took effect:

• The mansion tax is now also the seller’s responsibility by default.

That said, real estate contracts can specify a different arrangement, so it’s critical that these details are clearly outlined in writing.

Who Typically Pays What?

Here’s how costs are generally allocated in New Jersey transactions today:

• Mansion Tax
  Prior to July 10, 2025, buyers typically paid a flat 1% mansion tax on sales at or above $1,000,000.
  As of July 10, 2025, the seller pays the mansion tax, which now follows the graduated scale up to 3.5%. In competitive, multiple-offer situations, this cost may be negotiated with the buyer.

• Realty Transfer Fee (RTF)
  Typically a seller expense under state rules and local custom, though it can be negotiated.

• Buyer Costs
  Buyers generally cover standard lender fees, title and recording charges, and prorations for taxes and utilities.

How the Mansion Tax Impacts Net Proceeds: A Simple Example

Understanding the mansion tax is essential when estimating your net proceeds.

Example A — $1,000,000 sale price

• Mansion tax: $10,000 (1% of the purchase price)

• Paid by the seller unless otherwise negotiated

While this may seem straightforward, higher price points can significantly affect your bottom line—making accurate planning and strategic pricing more important than ever.

The Bottom Line

For Bergen County sellers, especially in today’s luxury market, the mansion tax is no longer just a buyer concern—it’s a key part of your selling strategy. Knowing how it works, who pays it, and how it affects your net proceeds allows you to price intelligently, negotiate confidently, and move forward without surprises.