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. The Realty Transfer Fee replaced the expiring Federal Documentary Tax in 1968. The State of New Jersey and New Jersey's twenty-one counties share Realty Transfer Fee proceeds. The County Treasurer's Office remits Realty Transfer Fee revenues to the State Treasurer on the tenth day following the month of collection, using the official form RTF-2 that the Director of the Division of Taxation has prescribed. Property Administration personnel respond to questions on a daily basis that taxpayers, county recording officers, and title agencies ask about the Realty Transfer Fee, and how the Fee applies to individual transfers of real property.
Forms needed for reporting and paying the Realty Transfer Fee can be downloaded from the State's website.
State regulations in applying the Realty Transfer Fee can be viewed here.
Exemptions from the Realty Transfer Fee
The Realty Transfer Fee shall not apply to a deed: a) for a consideration of less than $100; b) by or to the United States of America, this State, or any instrumentality, agency, or subdivision thereof; c) solely in order to provide or release security for a debt or obligation; d) which confirms or corrects a deed previously recorded; e) on a sale for delinquent taxes or assessments; f) on partition; g) by a receiver, trustee in bankruptcy or liquidation, or assignee for the benefit of creditors; h) eligible to be recorded as an "ancient deed" pursuant to R.S. 46:16-7; i) acknowledged or proved on or before July 3, 1968; j) between husband and wife, or parent and child; k) conveying a cemetery lot or plot; l) in specific performance of a final judgment; m) releasing a right of reversion; n) previously recorded in another county and full Realty Transfer Fee paid; o) by an executor or administrator of a decedent to a devisee or heir to effect distribution of the decedent's estate in accordance with the provisions of the decedent's will or the intestate laws of this State; p) recorded within 90 days following the entry of a divorce decree which dissolves the marriage between grantor and grantee; q) issued by a cooperative corporation, as part of a conversion of all of the assets of the cooperative corporation into a condominium, to a shareholder upon the surrender by the shareholder of all of the shareholder's stock in the cooperative corporation and the proprietary lease entitling the shareholder to exclusive occupancy of a portion of the property owned by the corporation.
County & Municipal Codes
New Jersey County Municipal Codes can be downloaded here.
Mansion Tax (Additional fee where consideration is over $1 million)
Effective February 1, 2005, a 1% fee is imposed upon grantees (buyers) on property transfers for consideration in excess of $1 million for property class 2 "residential"; class 3A "farm property (regular)" if effectively transferred with other property to the same grantee; and cooperative units, which are class 4C. The 1% fee is imposed on the entire amount of such consideration recited in the deed. The 1% fee is not imposed upon organizations determined by the Federal Internal Revenue Service to be exempt from Federal income taxation that are the buyers in deeds for a consideration in excess of $1 million.
Chapter 33, P.L. 2006, effective on August 1, 2006, provides that:
A fee of 1% is imposed on Class 4A "commercial properties" for an entire consideration in excess of $1 million as well as the classes already incurring the 1% fee.
The 1% fee does not apply if real property transfer is incidental to a corporate merger or acquisition and the equalized assessed value of the real property transferred is less than 20% of the total value of all assets exchanged in the merger or acquisition.
Buyers (grantees) in deeds involving Class 4A sales recorded on or before November 15, 2006, that were transferred pursuant to a contract fully executed before July 1, 2006, who remit the 1% fee shall have it refunded by filing a Claim for Refund with the Division within one year following the recording date of the deed.
Affidavit of Consideration for Use by Seller (Form RTF-1) is required for all Class 4 property deed recordings.
A fee of 1% is imposed on nondeed transfers of a controlling interest in an entity which possesses, directly or indirectly, a controlling interest in classified real property, payable to the Director, by the purchaser of the controlling interest.