The State of New Jersey has been in a financial crisis for awhile now. While Governor Corzine has promised to balance the budget, the legislature continues to come up with innovative ideas to raise money. Corzine now is thinking municipalities should be given more tax-raising options, possibly including local realty transfer taxes. Five bills have been introduced in the Legislature during the last year to allow cities and towns to charge a local tax on a home's sales price.
A bit of background. New Jersey's Realty Transfer Fee, is a state-imposed fee which was started in 1968 to offset administrative costs of tracking real estate transactions Politicians know a good thing when they see it and over the years this "nominal fee" has increased dramatically with the majority of the increase happening in the past few years.
On June 30, 2004, Assembly Bill No. 3115 (Chapter 66, P.L. 2004) and Assembly Bill No. 3128 (Chapter 55, P.L. 2004) were signed into law. Chapter 66 increased the Realty Transfer Fee rates as follows"
TOTAL CONSIDERATION NOT IN EXCESS OF $350,000
1. $2.00/$500 of consideration not in excess of $150,000;
2. $3.35/$500 of consideration in excess of $150,000 but not in excess of $200,000;
3. $3.90/$500 of consideration in excess of $200,000 but not in excess of $350,000.
TOTAL CONSIDERATION IN EXCESS OF $350,000
1. $2.90/$500 of consideration not in excess of $150,000;
2. $4.25/$500 of consideration in excess of $150,000 but not in excess of $200,000;
3. $4.80/$500 of consideration in excess of $200,000 but not in excess of $550,000;
4. $5.30/$500 of consideration in excess of $550,000 but not in excess of $850,000;
5. $5.80/$500 of consideration in excess of $850,000 but not in excess of $1,000,000;
6. $6.05/$500 of consideration in excess of $1,000,000.
During the same year, legislation was passed which has become known as the Nj ‘Mansion Tax". The statue, N.J.S.A. 46:15-7.2, which became effective on August 1, 2004, required the purchaser of property "zoned for residential use, whether improved or not" for consideration in excess of $1,000,000 to pay a fee (the "Mansion Tax") equal to one percent (1%) of the entire amount of consideration as a condition of recording the deed of conveyance.
Yes you read this correctly!!! If your house sold for over one million dollars, take the above calculation, add all the appropriate amounts at the appropriate dollar intervals and then, take the total and add an additional 1% of the TOTAL AMOUNT to the tax. Oh Excuse me, the transfer fee.
The New Jersey Home Sales Tax on an average home has increased 80% since 2003 according to a new website http://www.njhometax.com/.
So what will happen if the municipalities are allowed to add on their own Real Estate Transfer Fee or Home Tax? The website claims the extra municipal Home Sales Tax will push the total Home Sales Tax bill up 103% since 2003.
If this blog has made you want to do something about this proposed tax the click on the link to the left and sign the petition, and spread the word!
I would love to hear your thoughts on the subject. Email me directly or give me a call.
James Lockard
RE/MAX Properties
Office: 201-825-6600
Cell: 201-674-3114
Email: jlockard@remax.net
Website: http://www.bergencounty-homes.com/
Since that time, tennis courts have been added over by the red barn, a softball diamond was added in back of the barn and a soccer field was landscaped over on the west side of the lake. Today Crestwood Park has a children's playground and is home to the town's 9/11 Memorial which sits in a serene area in the north corner of the property.
