15.2 NJ Realty Transfer Fee (RTF), Rate Schedules & the Graduated Percent Fee

Nature and Purpose of the New Jersey Realty Transfer Fee (RTF)

The New Jersey Realty Transfer Fee (RTF), codified at N.J.S.A. 46:15-5 et seq., is a state excise tax imposed on the privilege of recording deeds that transfer title to real property within the State of New Jersey. First enacted in 1968, the RTF has been expanded repeatedly into a multi-tiered revenue instrument supporting the state's General Fund, the Shore Protection Fund, neighborhood preservation programs, and county administrative operations.

General Rule of Liability: The Seller/Grantor Pays

Under New Jersey law, the standard Realty Transfer Fee is statutory liability of the Grantor (Seller). The county recording officer (County Clerk or Register of Deeds) is legally prohibited from accepting any deed for recording unless the full statutory RTF is tendered simultaneously with the recording fee, or an executed Affidavit of Consideration establishing a statutory exemption is attached.

While real estate sales contracts are private legal agreements wherein parties may theoretically reallocate closing costs, the statutory default and near-universal standard practice in New Jersey dictates that the seller pays the entire standard RTF at the closing table as a debit against gross sales proceeds on the closing disclosure.

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Calculation of Consideration and Graduated Rate Structure

The RTF is computed on the "total consideration" reciting the actual monetary value of the transaction. Under N.J.S.A. 46:15-5, "consideration" includes:

• The actual currency or monetary funds paid or promised.
• The face amount of any promissory note or mortgage obligation given.
• The remaining unpaid balance of any preexisting mortgage or lien to which the transfer is subject (or which is assumed by the grantee).
• The fair market value of any personal property, real property, or legal rights exchanged.

Tiered Component Structure

The amount a county recording officer collects is the sum of several statutory components — a basic fee, an additional fee, a general purpose fee imposed only on consideration above $350,000, and a supplemental fee — all of which are quoted to practitioners as a single blended rate per $500 of consideration (or fractional part thereof). Candidates are not tested on the internal component split; they are tested on the blended per-$500 schedules published by the Division of Taxation and reproduced below.

Official Rate Schedules (Division of Taxation)

Which schedule applies is decided by the total consideration, and the chosen schedule then applies from the first dollar. There is no $350,000 breakpoint inside the over-$350,000 schedule — that figure is only the switch between the two tables.

Standard transactions and new construction — total consideration NOT over $350,000

Standard transactions and new construction — total consideration OVER $350,000

Senior citizens, blind or disabled persons, and low- and moderate-income housing (partial exemption)

Key Exam Takeaway: Crossing $350,000 does not simply add a bracket — it swaps the entire schedule. A $340,000 sale is billed at $2.00/$3.35/$3.90; a $360,000 sale is billed at $2.90/$4.25/$4.80 retroactively to the very first dollar, which is why the RTF jumps sharply just above the threshold.

Worked calculation. A Montclair home sells for $420,000. Because consideration exceeds $350,000, use the second table.

• First $150,000 ÷ $500 = 300 units × $2.90 = $870.00
• Next $50,000 ($150,000–$200,000) ÷ $500 = 100 units × $4.25 = $425.00
• Remaining $220,000 ($200,000–$420,000) ÷ $500 = 440 units × $4.80 = $2,112.00
• Total RTF charged to the seller = $3,407.00

Always round the consideration up to the next full $500 before dividing; the statute charges the full rate on any fractional part of $500.

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Statutory RTF Exemptions

New Jersey law provides both total exemptions (no RTF due) and partial exemptions (reduced rate schedule). Every deed claiming an exemption must have an executed Affidavit of Consideration for Use by Seller (Form RTF-1) attached upon submission to the County Clerk.

Total Statutory Exemptions (N.J.S.A. 46:15-10)

No Realty Transfer Fee is due when the deed satisfies any of the following statutory criteria:

1. Nominal Consideration: The deed is for consideration of less than $100.
2. Governmental Agencies: Deeds by or to the United States of America, this State, or any instrumentality, agency, or subdivision.
3. Security for a Debt: Deeds given solely in order to provide or release security for a debt or obligation.
4. Confirmation / Corrective Deeds: Deeds that confirm or correct a deed previously recorded.
5. Delinquent Tax Sales: Deeds on a sale for delinquent taxes or assessments.
6. Partition: Deeds on partition among co-owners.
7. Insolvency Fiduciaries: Deeds by a receiver, trustee in bankruptcy or liquidation, or assignee for the benefit of creditors.
8. Inter-Spousal and Familial Transfers: Conveyances between husband and wife or civil union partners, or between parent and child.
9. Cemetery Lots: Deeds conveying a cemetery lot or plot.
10. Specific Performance of a Final Judgment: available where a judge orders the transfer in accordance with the court's ruling — the Division of Taxation has ruled it does not cover a deed carrying out a settlement agreement merely incorporated into a divorce judgment.
11. Release of a Right of Reversion.
12. Estate Distribution: Deeds by an executor or administrator of a decedent to a devisee or heir to effect distribution of the estate under the will or the intestate laws of this State.
13. Post-Divorce Deeds: Deeds recorded within 90 days following entry of a divorce or dissolution decree between grantor and grantee.
14. Ancient deeds, deeds acknowledged or proved on or before July 3, 1968, deeds previously recorded in another county with the full fee paid, and certain cooperative-to-condominium conversion deeds.

The exemption candidates get wrong: a sheriff's deed on a mortgage foreclosure is NOT exempt. Exemption (e) reaches a sale for delinquent taxes or assessments — a tax sale, not a mortgage foreclosure. On a sheriff's sale the consideration for fee purposes is the bid amount plus any prior mortgages, liens, and encumbrances to which the purchaser remains liable, reported on Form RTF-8, and the Division of Taxation states in terms that the RTF-8 "is not an exemption from the Realty Transfer Fee." A conveyance into a revocable living trust likewise does not appear on the statutory list.

Partial Exemptions (N.J.S.A. 46:15-10.1)

A substantial reduction in the standard RTF rate is granted to specific qualifying grantors who convey residential real estate. To qualify for the partial exemption rate, the property must be a one- or two-family residential dwelling that is owned and occupied by the grantor at the time of sale:

• Senior Citizens: The grantor must be 62 years of age or older at the time of closing.
• Blind Persons: The grantor must meet statutory definitions of legal blindness certified by a physician.
• Disabled Persons: The grantor must be permanently and totally disabled, unable to engage in substantial gainful activity, and receiving federal or state disability benefits.
• Low- and Moderate-Income Housing: Sales of affordable housing units constructed, rehabilitated, or regulated under the Fair Housing Act.

Spousal Co-Ownership Nuance: If a property is owned jointly by spouses as tenants by the entirety, only one spouse must meet the age requirement of 62 or older to claim the partial exemption on their primary residence.

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The Graduated Percent Fee (the Former "Mansion Tax")

Codified at N.J.S.A. 46:15-7.2, New Jersey imposes a supplemental fee on the recording of a deed when consideration exceeds $1,000,000. From 2004 until mid-2025 this was a flat 1% paid by the grantee (buyer) and was universally called the "mansion tax." P.L. 2025, c.69, signed June 30, 2025 and effective July 10, 2025, rewrote the provision. Any guide, course manual, or practice question still teaching a buyer-paid flat 1% is describing repealed law.

What Changed on July 10, 2025

The Five Statutory Tiers

The statute imposes the fee "in an amount equal to the following percentage of the entire amount of consideration recited in the deed":

1. Not marginal — the whole price. This is the most heavily missed point. The rate is applied to the entire consideration, not just the slice above the threshold. A $2,100,000 sale is taxed at 2% of $2,100,000 = $42,000, not 2% of $100,000.
2. Cliff effect. Because each tier reprices the whole deed, a dollar over a threshold can cost tens of thousands. A $2,000,000 sale owes $20,000 (1%); a $2,000,001 sale owes $40,000.02 (2%). Brokers must flag this in pricing and negotiation strategy.
3. The $1,000,000 threshold is strict. Consideration must exceed $1,000,000. A deed reciting exactly $1,000,000.00 owes no Graduated Percent Fee.
4. The seller now pays. The Division of Taxation states plainly that "the seller is statutorily responsible for the RTF and the Graduated Percent Fee." Sellers should be counseled that a $1.2 million sale now carries a $12,000 seller-side line item that did not exist before July 2025.
5. Transition rule. The amendments do not apply to transfers under purchase and sale agreements fully executed before July 10, 2025 where the deed was recorded (or the controlling interest transferred) before November 15, 2025; qualifying parties could seek a refund of amounts collected above 1%.

Property Classes Subject to the Graduated Percent Fee

The fee reaches deeds where the land conveyed is classified as:

• Class 2 — residential;
• Class 3A — farm property (regular), where the transfer also includes a Class 2 residence;
• Class 4A — commercial (non-industrial, non-apartment); and
• Class 4C — cooperative units.

Exam Calculation Example: A Princeton residence closes at $1,450,000 under a contract signed in March 2026. The seller owes the Graduated Percent Fee at the 1% tier on the entire price: $1,450,000 × 0.01 = $14,500, in addition to the standard RTF computed on the over-$350,000 schedule.

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Mandatory Affidavits of Consideration: RTF-1 and RTF-1EE

To ensure statutory compliance and proper fee collection, the New Jersey Division of Taxation requires specific state affidavits to accompany deeds submitted for recording:

1. Form RTF-1 (Affidavit of Consideration for Use by Seller)

This form must be signed under oath by the Grantor (Seller) and attached to the deed whenever:

• The deed recites consideration of $100 or less (nominal consideration).
• The seller is claiming a full exemption under N.J.S.A. 46:15-10.
• The seller is claiming a partial exemption (Senior Citizen age 62+, blind, disabled, or low-mod housing).
• The conveyance involves Class 4 (commercial/industrial/apartment) real property.

2. Form RTF-1EE (Affidavit of Consideration for Graduated Percent Fee)

Retitled by the Division of Taxation as the Affidavit of Consideration for Graduated Percent Fee, this form is now signed by the Grantor (Seller) and must be annexed to:

• Every deed reciting consideration over $1,000,000, certifying the applicable graduated tier; and
• Every commercial property transfer, whether or not the Graduated Percent Fee is due.

Exemptions from the Graduated Percent Fee are enumerated on the face of Form RTF-1EE itself.

+-----------------------------------------------------------------------------+
|              NEW JERSEY DEED RECORDATION (on and after 7/10/2025)           |
+-----------------------------------------------------------------------------+
|   STANDARD REALTY TRANSFER FEE (RTF)     |   GRADUATED PERCENT FEE          |
|   - Statutory debtor: SELLER (grantor)   |   - Statutory debtor: SELLER     |
|   - Blended rate per $500 of price       |   - 1 / 2 / 2.5 / 3 / 3.5 %      |
|   - Two schedules, split at $350,000     |   - On the ENTIRE consideration  |
|   - Partial exemption: senior / blind /  |   - Applies only if price > $1M  |
|     disabled / low-mod, owner-occupied   |   - Classes 2, 3A, 4A, 4C        |
|   - Document: Form RTF-1 (seller)        |   - Document: RTF-1EE (seller)   |
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