And if you're selling a home in Monmouth County or along the Ocean County waterfront, you need to know this before you price your home.
New Jersey quietly made a major change to how high-value real estate transactions get taxed. If you're planning to sell a home priced at $1 million or more, the number on your net sheet just changed. Here's what happened, what it means for you, and why this conversation matters before you list.
Out With the "Mansion Tax," In With the Graduated Percent Fee
For over 20 years, New Jersey had what everyone called the "mansion tax": a flat 1% fee on sales over $1 million, paid by the buyer at closing. It was straightforward, it was expected, and buyers planned for it.
That changed on July 10, 2025.
Governor Phil Murphy signed the FY 2026 budget on June 30, 2025, and with it came a major overhaul of how New Jersey taxes high-value property sales. The old buyer-paid 1% fee is gone. In its place is something called the Graduated Percent Fee, or GPF, and it now falls entirely on the seller.
What the New Fee Structure Looks Like
Here is the tiered breakdown of the new fee, which applies to the entire sale price:
Here is the part that trips sellers up: the fee applies to the entire sale price, not just the amount above each threshold. That is an important detail many sellers miss. On a $1.5 million home, the GPF alone is $15,000, on top of the base Realty Transfer Fee. At $4 million, the GPF reaches $140,000.
The cliff effects are real. On a $2.6 million sale, you may now owe $65,000 (2.5%), versus $26,000 under the old system. That is a significant change to your net proceeds.
This Is Separate From Your Realty Transfer Fee
Let's be clear on this because confusion here costs money. Yes, the Graduated Percent Fee is separate from the Realty Transfer Fee. The RTF has been in effect since 1968. The GPF is an additional, supplemental fee that applies only when the sale price exceeds $1 million. You are on the hook for both as a seller.
Why This Hits Monmouth County and Waterfront Ocean County Hard
We are not talking about a tax on rare trophy properties anymore. In Monmouth County and along the waterfront in Ocean County, homes priced at $1 million and above are not unusual. Coastal towns like Spring Lake, Manasquan, Bay Head, Lavallette, and Brielle regularly see sales in this range. Some neighborhoods have seen $2 million plus become the new normal.
That means more sellers in our area are walking into closing conversations without knowing this fee exists or what it will cost them. That gap between expectation and reality on the net sheet is exactly where deals fall apart, resentments build, and trust erodes.
We do not let that happen to our clients.
What This Means for Your Listing Strategy
While the law places legal liability on the seller, the parties can contractually agree to allocate the fee differently. Buyers should review contract language carefully, because the parties remain free to shift the tax obligation by agreement.
That opens the door to pricing and negotiation conversations that did not exist before. Some sellers are adjusting their list price. Others are using it as a negotiating lever. There is no one-size-fits-all answer, and anyone who tells you otherwise is not doing the math with you.
NJ Realtors CEO Doug Tomson said it plainly: "The Graduated Percent Fee has proven to be onerous for the New Jersey housing market. At a time when affordability remains one of the state's most pressing challenges, adding additional transaction costs makes it harder for buyers and sellers to participate in the market that so desperately needs participation."
We agree. And we are fighting alongside our sellers to make sure they understand every dollar before they sign anything.
What You Should Do Right Now
If you are thinking about selling a home priced at or near $1 million in Monmouth County or the waterfront Ocean County market, here is your short list:
- Get a real net sheet. Not a ballpark. A real one, with the GPF factored in at your actual price point.
- Talk to your attorney. This is a legal fee with nuances around contract language, timing, and exemptions. Your real estate attorney is your partner here.
- Talk to us before you price. Your list price strategy and your net proceeds need to account for this fee from day one, not as a surprise at the closing table.
At DeFelice Realty Group, we are having these conversations every day. We know this market, we know these numbers, and we are here to make sure you walk into your sale with eyes wide open.
Ready to talk? Reach out and let's run your numbers together.
Information in this post is based on NJ Realtors guidance and publicly available state resources as of 2025-2026. Always consult a licensed NJ real estate attorney for advice specific to your transaction.
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