| |
|
Click
"to top" links to return to
this menu. |
The
Realty Transfer Tax & Recent Legislation |
New
Jersey State Treasurer John E. McCormac announced on July 22,
2004 that Assembly Bill No. 3115 (Chapter 66, P.L. 2004) and Assembly
Bill No. 3128 (Chapter 55, P.L. 2004), amending the Realty Transfer
Fee statute, were signed into law recently. Chapter 66 has increased
the Realty Transfer Fee rates and applies to recordation of deeds
reflecting New Jersey real property transfers. Chapter 55 requires
the filing of estimated Gross Income Tax on the transfer of real
property by non-residents of the State as a condition to recording.
Chapter 55 is effective on August 1, 2004. Chapter 66 is effective
immediately, but applies to deeds evidencing transfers of real
property that occur on or after August 1, 2004 (that is, deeds
dated on or after August 1, 2004).
For
all three fees/taxes, the date of the deed is operative. This
means that the new fees and procedures/forms apply to all deeds
dated on or after August 1, 2004. If no deed date appears on the
deed, the date used to implement the new rates and procedures
will be the date of recording.
According
to the posted information, an adjustment period of 60 days (until
October 1, 2004) will be observed by the County Clerks/Registers.
During this time period, both the “old” and the “new” fees/procedures
will be followed depending upon the date of the deed. Thus, for
deeds dated prior to August 1, the “old” rates and procedures
will apply; for deeds dated on and after August 1, the “new” rates
and procedures will apply. On and after October 1, 2004, only
the “new” rates and procedures will apply.
For
more specific information on the Non-Resident estimated gross
income tax, click here.
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.
to
top
Regular
Fees - No Exemptions |
Example
Calculation: Consideration of $250,000 |
- $2.00
per $500 up to $150,000
|
$600.00 |
- $3.35
per $500 over $150,000 up to $200,000
|
$335.00 |
- $3.90
per $500 over $200,000 up to $350,000
|
$390.00 |
| Total
Transfer Fee Due: |
$1,325.00 |
| Example
Calculation: Consideration of $600,000.00 |
- $2.90
per $500 up to $150,000
|
$870.00 |
- $4.25
per $500 over $150,000 up to $200,000
|
$425.00 |
- $4.80
per $500 over $200,000 up to $550,000
|
$3360.00 |
- $5.30
per $500 over $550,000 up to $850,000
|
$530.00 |
| Total
Transfer Fee Due: |
$5,185.00 |
to
top
Senior
Citizen, Blind, Disabled, Low & Moderate Incoming Housing |
Transfers
where the consideration does not exceed $350,000:
- $.50
per $500 or fraction thereof of consideration up to $150,000
- $1.25
per $500 or fraction thereof of consideration over $150,000
Example
Calculation: Consideration of $250,000 |
| $.50
per $500 up to $150,000 |
$150 |
| $1.25
per $500 over $150,000 |
$250 |
Total
Transfer Fee Due: |
$400 |
Transfers
where the consideration exceeds $350,000:
- $1.40
per $500 or fraction thereof of consideration up to $150,000
- $2.15
per $500 or fraction thereof of consideration in greater than
$150,000 but not exceeding $550,000
- $2.65
per $500 or fraction thereof of consideration in greater than
$550,000 but not exceeding $850,000
- $3.15
per $500 or fraction thereof of consideration in greater than
$850,000 but not exceeding $1,000,000
- $3.40
per $500 or fraction thereof of consideration in greater than
$1,000,000
Example
Calculation: Consideration of $450,000 |
| $.50
per $500 up to $150,000 |
$420 |
| $2.15
per $500 over $150,000 up to $550,000 |
$1290 |
Total
Transfer Fee Due: |
$1710 |
- To
be eligible for the 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 of Disabled owner must be legally
blind or totally disabled in one or two family homes 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 or 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.
|
to
top
An
Affidavit of Consideration (RTF-1) is now required to be affixed
to and recorded with all deeds transferring “new construction”
in addition to the existing claims for a partial exemption. To
ensure the proper disposition of Realty Transfer Fees into the
appropriate funds, “NEW CONSTRUCTION” must now be printed clearly
in upper case lettering on the top of the first page of deeds
transferring new construction as well as on the Affidavit of Consideration.
Grantors conveying title to new construction who fail to subscribe
and append an Affidavit to the deed are guilty of a disorderly
persons offense.
to
top
"Mansion
Tax" (Transfers in Excess of $1 Million)
|
For
transfers of real property zoned residential, whether improved
or not, the new law imposes an additional fee on transfers in
excess of $1 million to be paid by the grantee. The fee equals
1% of the full consideration (for example, on a transfer of a
$1,100,000.00 property zoned residential the grantee will pay
a fee of $11,000.00). Like the realty transfer fee, this “mansion
tax” payment must accompany the deed submitted for recording.
This new fee only applies to property zoned residential so it
is imperative that municipal zoning information be obtained as
part of your municipal tax search. Please make sure your tax search
provider includes this information as part of its tax search.
to
top
In
summary, the following changes will apply to deeds under the revised
laws:
to
top
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 assessments 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.
to
top
When
Affidavit Must Be Annexed to a Deed |
- An
affidavit must be annexed to and recorded with the deed in the
event that the full consideration is not recited in both the
deed and in the acknowledged or proof of the execution thereof.
- An
Affidavit must also be annexed to and recorded with the deed
where the exemption from the fee is claimed.
- Any
claim for exemption from the increased fee must be supported
by this Affidavit and attached to the deed at the time or recording,
in addition to any statement otherwise required by the law with
respect to consideration.
- Any
exemptions including government agencies and considerations
under $100 must have an affidavit attached.
- For
new construction transfers, an affidavit executed by the grantor
stating that the transfer is of new construction must be appended
to the deed. We assume that a standard affidavit of consideration
executed by the grantor attesting that the property is a transfer
of new construction, will satisfy this requirement.
to
top
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 interstate
laws of this State.
- Recorded
within 90 days following the entry of a divorce decree which
dissolves the marriage between the grantor and grantee.
to
top
|