The Realty Transfer Fee is imposed upon the recording of deeds evidencing transfers of title to real property in the State of New Jersey. The Fee is required to be paid upon the recording of deeds conveying title to real property in New Jersey. The Realty Transfer Fee is calculated based on the amount of consideration recited in the deed or, in certain instances, the assessed valuation of the property conveyed divided by the Director’s Ratio. Payment of the Fee is a prerequisite for recording the deed. The R.T.F. is usually collected at the real estate closing by the legal representatives or title insurance agents responsible for recording the deed at the county registry offices.
At ALL purchase closings, the seller must provide one of the following :
Effective 12/23/2004, the State of New Jersey
has issued form GIT/REP4A, Waiver of Seller's Filing Requirement of GIT/REP
Forms and Payment for Corrected Deed With No Consideration. This new form is
to be completed by the title owner recording a deed to which this form is
attached for corrective or confirmatory purposes only which needs to be
rerecorded or re-recorded due a typographical, clerical, property
description or other scrivener error or omission and there is no
consideration for the corrective or confirmatory deed that is subject to the
Gross Income Tax estimated payment requirements under C.55 P.L. 2004 and is
not covered by one of the other GIT/REP forms. The grantee will complete,
date and sign the form. Download form.
In addition, an Affidavit of
Consideration will still also be required setting forth the grounds for
exemption from paying the Realty Transfer Fee based on the deed being a
corrective deed.
In addition, NO estimated income tax payment or
form is required as a condition for the recording of sheriff's deeds.
There are 5 categories of exemptions from the gross income tax. If one
of the following exemptions is being claimed, a Seller's Residency
Certification/Exemption form must be completed and submitted with the deed
for recording:
Non-resident sellers who are individuals,
estates or trusts may pre-file and pre-pay the estimated gross income tax at
a state tax office. The state will issue a Nonresident Seller's Tax
Prepayment Receipt which is to be submitted to the recording office at the
time the deed is presented for closing. Prior to closing, taxpayers
prepaying will complete the receipt along with the NJ-1040-ES and file them
at one of the Division regional branch offices. You can find the Division
regional branch offices by clicking on the following link, then click on
"Contact Us" and then click on "Regional Offices":
http://www.state.nj.us/treasury/taxation Any questions regarding the above
new taxes and forms may be directed to the Division of Taxation Taxpayer
Services Branch at 609-292-6400.
If a non-resident seller has not
prepaid the estimated gross income tax, a Nonresident Seller's Tax
Declaration must be obtained together with payment of the estimated tax. The
Declaration and payment must be submitted to the recording office at the
time the deed is presented for recording.
The estimated tax is determined by
multiplying the seller's gain times the Gross Income Tax highest rate of
8.97%. In no case may the estimated tax be less than 2% of the consideration
paid. The law has been amended in January 2005 to confirm that even if there
is no gain, or the gain is minimal, the seller must pay a sum equivalent to
2% of the gross consideration.
The Mansion Tax is paid by the purchaser. The Mansion Tax rate is 1% of the sales price when the price is more than $1,000,000. The Mansion Tax applies to all deeds where the land conveyed is classified under the following Administrative Codes (N.J.A.C. 18:12-2.2) :
The following classes are not required to remit the mansion tax:
The amended RTF-1EE
Affidavit of Consideration for Use by Buyer must be used for all
transactions over $1,000,000 regardless of property class and whether or not
the mansion tax must be paid.
Please
note that there is a space at the top of the RTF-1 and RTF-1EE forms that
calls for the County Municipal Code. The List of Codes can be found at
Municipal Code List.
Furthermore, if
the grantee is exempt from federal income taxation under IRC 501 (c)(3) or
meets the requirements of the exempt transactions provided in N.J.S.A.
46:15-10, the transfer is exempt. The Mansion Tax Amendment is effective
August 1, 2006. Commercial property deeds recorded on or before November 15,
2006 under a contract entered into before July 1, 2006 will get special
treatment. The 1% fee must be paid upon recording. the fee will be refunded
upon submission of a proper claim to the Division of Taxation.
The law also applies to non-deed
transfers of a controlling interest ( over 50% ) in an entity that owns
Class 4A property when the total consideration for transfer is in excess of
$1,000,000. This provision is intended to prevent the avoidance of the new
transfer tax by the sale of a company owning Class 4A property rather than a
sale of the property itself. The fee shall not apply to a deed if a real
property transfer is incidental to a corporate merger or acquisition and the
equilized assessed value of the real property transferred is less than 20%
of the total assets exchanged in the mergerof acquisition. A grantee
claiming an exemtion from the 1% fee in such instances, when the deed is
offered for recording, is now required to file a merger document in addition
to an Affidavit of Consideration for Use by the Buyer. For additional
information, see the copy of the Notice issued by the State of New Jersey,
Division of Taxation annexed herein.
Amendatory Realty
Transfer Fee Legislation document.
For
transactions involving Class 4A properties subject to the additional realty
transfer fee imposed on the buyer, you must complete Section (2) (A) of the
RTF-1 and Section (2) (C) of the RTF-1EE. There is a reference to the
Director's Ratio to be inserted as part of the calculation. The Director's
Ratio is column 2 on the Table of Equalized Values for 2005 established by
the Tax Court. The 23-page document listing ratios by county can be found at
Director's Ratio link to table of equilized values as posted on Taxation's
web site [scroll down to list item on the page].
In addition, it appears that the Treasurer's office has
notified the counties that any deed received before August 1, 2006 will not
have to pay the new tax even if not recorded until August 1, 2006 or later.
See attached announcement sent out by the Union County Clerk's Office.
Questions regarding the changes in the
statute requirements and whether a property is exempt from the Mansion Tax
or questions in connection with any possible refund of taxes should be
directed to the Division of Taxation. Their website is
www.state.nj.us/treasury/taxation Copies of A4701 and S1982 ( The Commercial
Property Mansion Tax) amending the Statute N.J.S.A. 46:15-7.2 can be found
at www.njleg.state.nj.us
Download
"Affidavit of Consideration for Use by Buyer" Form
Disclaimer- The information, website links and fee and tax calculators contained in this website are for general information and convenience purposes only. While Vested Land Services LLC. endeavors to keep the information and calculator functionality up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, fee and tax calculators or related graphics contained on the website for any purpose. We recommend that you contact the appropriate County Clerk's Office or other governmental agency or department to confirm to confirm the accuracy of the information provided in and calculations obtained from our website. Any reliance you place on information and calculations from this website is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever, including but not limited to damages arising from loss of data or profits arising out of, or in connection with, the use of this website. Through this website you are able to link to other websites which are not under the control of Vested Land Services LLC. We have no control over the nature, content and availability of those sites. The inclusion of any links is for the convenience of our visitors and does not imply a recommendation or endorse the views expressed within them. Every effort is made to keep our website up and running smoothly. However, Vested Land Services, LLC takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues.
