All instruments entitles to be recorded by the County Recording Officer which purport to convey or transfer title or realty in this State are subject to submit payment of Realty Transfer Fees based on the consideration stated on the instrument.
New Realty Transfer Fees
Effective August 1, 2004
Two bills were recently signed into law in New Jersey. The first, Assembly Bill No. 3115 increases the Realty Transfer Fee rates of property transfers. The second, Assembly Bill No. 3128 requires the filing of estimated Gross Income Tax on the transfer of real property by nonresidents of the State as a condition to recording. BOTH BILLS WILL IMPACT DEEDS DATED AUGUST 1, 2004 AND FORWARD. NEITHER BILL WILL APPLY TO DEEDS DATED PRIOR TO AUGUST 1, 2004 AND RECEIVED FOR RECORDING PRIOR TO OCTOBER 1, 2004. The ‘Deed Date’ is the date stated at the top of the first page of the deed. If there is no date at the top of the first page and the deed is received after August 1, 2004 the ‘recording date’ will be considered the deed date and the new rates and procedures will apply.
The Atlantic County Clerk will accept for recording deeds dated prior to August 1, 2004, using the ‘old’ rates and procedures, until OCTOBER 1, 2004. Thereafter ALL DEEDS will be recorded using the ‘NEW” rates and procedures. If there is a conflict the ‘new’ rates will have to be paid and a claim made to the Division of Taxation for a refund.
REGULAR FEES – NO EXEMPTION & NEW CONSTRUCTION – NO EXEMPTIONS
TOTAL CONSIDERATION NOT IN EXCESS OF $350,000
- $2.00/$500 of consideration not in excess of $150,000;
- $3.35/$500 of consideration in excess of $150,000 but not in excess of $200,000;
- $3.90/$500 of consideration in excess of $200,000 but not in excess of $350,000;
TOTAL CONSIDERATION IN EXCESS OF $350,000
- $2.90/$500 of consideration not in excess of $150,000;
- $4.25/$500 of consideration in excess of $150,000 but not in excess of $200,000;
- $4.80/$500 of consideration in excess of $200,000 but not in excess of $550,000;
- $5.30/$500 of consideration in excess of $550,000 but not in excess of $850,000;
- $5.80/$500 of consideration in excess of $850,000 but not in excess of $1,000,000;
- $6.05/$500 of consideration in excess of $1,000,000.
SENIOR CITIZEN, BLIND, DISABLED, LOW & MODERATE INCOME HOUSING
TOTAL CONSIDERATION NOT IN EXCESS OF $350,000
- $.50/$500 of consideration not in excess of $150,000;
- $1.25/$500 of consideration in excess of $150,000 but not in excess of $350,000;
TOTAL CONSIDERATION IN EXCESS OF $350,000
- $1.40/$500 of consideration not in excess of $150,000;
- $2.15/$500 of consideration in excess of $150,000 but not in excess of $550,000;
- $2.65/$500 of consideration in excess of $550,000 but not in excess of $850,000;
- $3.15/$500 of consideration in excess of $850,000 but not in excess of $1,000,000;
- $3.40/$500 of consideration in excess of $1,000,000.
To be eligible for Senior Citizen Exemption, Grantor must be 62 years of age or over, and owned and occupied property at time of sale. Property must be one or two family residential with no joint owners other than spouse or other exempt owners.
To be eligible for Blind or Disabled owner must be legally blind or totally disabled in a one or two family home owned and occupied by Grantor at time of sale. No joint owners other than spouse or other exempt owner. Disabled owner must not be employed and receiving any disability payments.
To be eligible for Low and Moderate Income Housing property must be affordable according to H.U.D. standards and meet requirements of region. Must be reserved for occupancy and subject to resale controls.
PROPERTIES EXCEEDING $1,000,000 PAID BY GRANTEE
A fee on the transfer of real property classified as 2 – 3A – 4A or 4C(Cooperative Unit), whether improved or not, for consideration in excess of $1,000,000, of 1% of the entire amount of consideration, is now imposed on the grantee, or buyer.
Attorneys, title agencies, and property class on the filed Affidavit of Consideration. Questions regarding this fee should be directed to (609)292-7974.
Proceeds from the Realty Transfer Fee provide support for the Public Health Priority Fund, shore protection initiatives, housing programs, extraordinary special education and municipal aid, and direct aid to New Jersey Counties.
TRANSFER TAX FEES FOR SHERIFF’S DEED:
There is a separate affidavit to be submitted with Sheriff’s Deeds. As a general rule, in the case of a Sheriff’s Deed confirming a sheriff’s sale, the amount of the realty transfer fee shall be computed upon the amount of the accepted bid for the property sold:
- Where, however, the sale is for delinquent taxes or an assessment, no fee is imposed.
- Where a deed to real estate is executed by a sheriff to a mortgagee who bids the property at a foreclosure sale to satisfy a mortgage lien, the Realty Transfer Fee will be computed upon the amount bid for the property plus the remaining amount of any superior mortgage liens.
WHEN AFFIDAVIT MUST BE ANNEXED TO DEED: Please refer to instructions on back of affidavit.
EXEMPTIONS FROM THE FEE:
The fee imposed by the Act shall not apply to a deed:
- For consideration of less than $100.00
- By or to the United States of America, this State, or any instrumentality, agency or subdivision thereof.
- Solely in order to provide or release security for a debt or obligation;
- Which confirms or corrects a deed previously recorded.
- On a sale for delinquent taxes or assessments.
- On partition
- By a receiver, trustee in bankruptcy or liquidation, or assignee for the benefit of creditors.
- Eligible to be recorded as an ‘ancient deed’ pursuant to R.S. 46:16-7.
- Acknowledged or proved on or before July 3, 1968.
- Between husband and wife, or parent and child
- Conveying a cemetery lot or plot
- In specific performance of a final judgment.
- Releasing a right of conversion.
- Previously recorded in another county and full realty transfer fee paid or accounted for as an evidenced by written instrument, attested to be the grantee and acknowledged by the county recording officer of the county of such prior recording, specifying the county, book, page, date or prior recording, and amount of realty transfer fee previously paid.
- By an executor or administrator of a decedent to as an 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.
- Recorded within 90 days following the entry of a divorce decree which dissolves the marriage between grantor and grantee.
* Affidavits are available on the New Jersey Department of Treasury web site. The address is http://www.state.nj.us/treasury/taxation
NONRESIDENT – GROSS INCOME TAX
Chapter 55 now requires for transactions occurring on or after August 1, 2004 nonresident individuals, estates or trusts that sell or transfer real property in New Jersey to make an estimated Gross Income Tax payment prior to the recording of the deed. The payment must be remitted to the Division of Taxation Prior to closing or can be made at closing.
The estimated payment is determined by multiplying the seller’s gain, as Computed for tax purposes, times the Gross Income Tax highest rate of 8.97%. In no case may the estimated payment be less than 2% of the consideration paid. Prior to closing, sellers prepaying will complete the Nonresident Seller’s Tax Prepayment Receipt from GIT/REP-2 along with NJ 1040ES and file them at one of the Division’s regional branch offices. (Locations of these branch offices are listed on the Division’s Website shown below.) Sellers not prepaying must complete the Nonresident Seller’s Tax Declaration from GIT/REP-1 and make payment at closing.
Sellers that meet one of the following conditions are not required to make estimated payments and will complete the Seller’s Residency Certification/Exemption from (GIT/REP-3) which must be submitted at closing.
- Seller is a resident of New Jersey and will be filing a resident Gross Income Tax return for the year of the sale.
- Seller will be claiming an Income exclusion under Section 121 of the Internal Revenue Code of 1986 for the property being sold.
- Seller is a mortgagor conveying the mortgaged property to a mortgagee in foreclosure or in a transfer in lieu of foreclosure with no additional consideration.
- Seller, transferor or transferee is an agency or authority of the United States of America, or the State of New Jersey, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or a private mortgage insurance company.
- Seller is not an individual, estate or trust and as such is not required to make an estimated payment pursuant to N.J.S.A. 54A:1-1 et seq.
- The total consideration received is $1,000 or less and as such not required to make an estimated payment pursuant to N.J.S.A. 54A:1-1 et seq.
The new Gross Income Tax forms GIT/REP-1 Nonresident Seller’s Tax Declaration and GIT/REP-3 Seller’s Residency Certification/Exemption are available from the various County Clerk’s Offices, Division of Taxation offices or can be downloaded from the Division of Taxation’s website at www.state.nj.us/treasury/taxation. Form GIT/REP-2 Nonresident Seller’s Tax Prepayment receipt is only available at on of the Divisions of Taxation’s Regional Taxpayer Service Locations. Samples of the new forms and instructions are attached for review only.
The buyer will submit the Seller’s Residency Certification/Exemption, the Nonresident Seller’s Tax prepayment Receipt, or the Nonresident Seller’s Tax Declaration and tax payment to the county clerk’s office when the deed is recorded. No deed for the sale or transfer of real property shall be accepted or recorded by the county recording officer without the simultaneous filling of the appropriate forms with any required payment of the tax due or proof of payment.
Questions on Chapter 55 and the new Gross Income Tax estimated payment requirements should be directed to (609) 292-6400.
For the purposes of this law, county recording officers shall act as the agents of the Director of the Division of Taxation. County treasurers are permitted to retain $10.00 per filing of the Nonresident Seller’s Tax Declaration form to offset additional direct expenditures incurred by the county recording officer and the county treasurer for the implementation of these responsibilities.
Attorneys, title insurance officers, and participants in real property transfers are urged to forward the necessary closing documents to the county recording officer as soon as possible to facilitate the implementation of the new laws.
For additional information on the new rate increases, gross income tax requirements, or to download the newly devised Realty Transfer Fee forms, please visit the Division of Taxation’s Website at:
Division of Taxation
NJ Realty Transfer Fee Information
Realty Transfer Fee Schedule – 2004