Realty Transfer Fees have been an unfortunate reality in New Jersey since 1968. The original purpose was meant to defray the cost of tracking the transfer of real properties. Funds from the RTF are shared between the state and counties. The state portion of the revenue is allocated to neighborhood revitalization, shore protection, extraordinary aid and the state’s general fund. The counties are responsible for disbursement of their portion of the revenue.
Want to know what the RTF will be on your next transaction? Check out the RTF Calculator.
The Realty Transfer Fee applies to all residential and commercial property transfers.
The transfer fee is made up of five parts: the basic fee, which was established in 1968 and increased in 1975; the additional fee, established in 1985; the supplemental fee, which was established in 2003; the general purpose fee, established in 2004; and the 1 percent fee, established in 2004 and extended to commercial property in 2006.
On June 27, 2018, the New Jersey State Legislature attempted to double the realty transfer fee. The RTF is already a burdensome tax on homeowners selling their property and proposing to double this fee is just one more tax property owners should not be responsible for. There are approximately 60,000 homes worth over $1 million in the Garden State. If passed, there would have been a bare minimum of $10,000 added to the expenses of purchasing a home of that price range. It would have been one more reason for high income residents to leave the state and take with them their potential contributions to the economy.
An Affidavit of Consideration is required to be affixed to and recorded with all deeds transferring “new construction” in addition to the existing claims for a partial exemption.
NEW CONSTRUCTION must be printed clearly in upper case lettering on the top of the first page of deeds transferring new construction.
Download the Realty Transfer Fee Affidavit of Consideration for Sellers.
Download the Realty Transfer Fee Affidavit of Consideration for Buyers.
In addition to the regular realty transfer fee, a 1 percent fee is assessed on residential and commercial property sold for more than $1 million.
The fee on commercial property was enacted in July 2006. NJ Realtors® secured an amendment that exempts those commercial transactions where a contract was fully executed by July 1, 2006 and the deed is recorded on or before November 15, 2006. Buyers who fall under this exemption are required to pay the 1 percent fee and request a refund from the New Jersey Division of Taxation within one year following the date of the deed recording. An explanation letter to deed recorders from the Division of Taxation further explains the provisions and exemptions of the 1 percent fee.
The law also exempts any transfer of property to a charitable organization that is exempt from federal income tax under section 501(c)(3) of the federal Internal Revenue Code.