[co-author: Ayah Moshet]
As of July 10, 2025, the Mansion Tax and Controlling Interest Transfer Tax (“CITT”) now requires sellers of certain classes of real property (and controlling interest involving certain classes of real property) transferred for over $1 million to pay anywhere from 1% to 3.5% of consideration.
Previously, the Mansion Tax and CITT were the payment responsibility of buyers of real property (and controlling interests) exceeding $1 million. Until July 9, 2025, buyers were responsible for the fees attached to properties (or controlling interests) purchased over $1 million. Buyers previously paid only 1% of the consideration paid for the applicable transactions.
Amendments to Mansion Tax and CITT
However, on June 30, 2025, Governor Murphy modified the Mansion Tax and Controlling Interest Transfer Tax by signing bill A-5804/S-4666 into law. The new law provided a ten-day window before going into effect as part of the 2026 fiscal year budget. The new law requires sellers, not buyers, to cover the “additional fee and controlling interest transfer tax” upon closing.
Additionally, the law increased the rate for the fees and taxes, depending on the scale of the consideration received. The maximum fee is 3.5% for transfers exceeding $3.5 million.
- 1% tax for consideration over $1,000,000 to $2,000,000
- 2% tax for consideration over $2,000,000 to $2,500,000
- 2.5% tax for consideration over $2,500,000 to $3,000,000
- 3% tax for consideration over $3,000,000 to $3,500,000
- 3.5% tax for consideration over $3,500,000
Properties Impacted
As part of the Realty Transfer Fee framework, the Mansion Tax and CITT impose a fee on certain real property transactions. The taxes apply to the following categories of real property:
- Residential property (Class 2)
- Commercial property (Class 4A)
- Certain farm property (Class 3A)
- Cooperative units
To view the new law, click here.
