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.
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