Eliminates tiered fee structure for fees and taxes imposed on property transfers valued over $1 million.

S3309

SENATE, No. 3309

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 5, 2026

Sponsored by:

Senator� CARMEN F. AMATO, JR.

District 9 (Ocean)

Co-Sponsored by:

Senator Corrado

SYNOPSIS

���� Eliminates tiered fee structure for fees and taxes
imposed on property transfers valued over $1 million.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning fees and taxes on certain transfers of real
property for over $1 million, and amending P.L.2004, c.66 and P.L.2006, c.33.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 8 of P.L.2004,
c.66 (C.46:15-7.2) is amended to read as follows:

���� 8. �a. �In addition to all
other fees imposed under P.L.1968, c.49 (C.46:15-5 et seq.), there is imposed a
fee upon the grantor of a deed for the transfer of real property:

���� (1)� that is classified
pursuant to the requirements of N.J.A.C.18:12-2.2 as Class 2
"residential";

���� (2) (a) that includes property
classified pursuant to the requirements of N.J.A.C.18:12-2.2 as Class 3A:
"farm property (regular)" but only if the property includes a
building or structure intended or suited for residential use, and

���� (b)� any other real property,
regardless of class, that is effectively transferred to the same grantee in
conjunction with the property described in subparagraph (a) of this paragraph;

���� (3)� that is a cooperative
unit as defined in section 3 of P.L.1987, c.381 (C.46:8D-3); or

���� (4)� that is classified
pursuant to the requirements of N.J.A.C.18:12-2.2 as Class 4A "commercial
properties
[
.
]
"
that
is transferred for

����
[
The fee imposed upon the grantor
of a deed for the transfer of real property pursuant to this subsection shall
be in an amount equal to the following percentage of the entire amount of
consideration recited in the deed: if the
]

consideration
[
is
]
in excess of
$1,000,000
[
but
not in excess of $2,000,000
]

recited in the deed
,
which fee shall be an amount equal to
one
percent
[
;
if the consideration is in excess of $2,000,000 but not in excess of
$2,500,000, two percent; if the consideration is in excess of $2,500,000 but
not in excess of $3,000,000, two and one-half percent; if the consideration is
in excess of $3,000,000 but not in excess of $3,500,000, three percent; if the
consideration is in excess of $3,500,000, three and one-half percent.� The fee
imposed pursuant to this subsection shall
]

of the entire amount of such consideration, which fee shall
be collected
by the county recording officer at the time the deed is offered for recording
and remitted to the State Treasurer not later than the 10th day of the month
following the month of collection for deposit into the General Fund.

���� b. (1) The fee imposed by
subsection a. of this section shall not apply to a deed if the grantee of the
deed for the transfer of real property is an organization determined by the
federal Internal Revenue Service to be exempt from federal income taxation
pursuant to paragraph (3) of subsection (c) of section 501 of the federal
Internal Revenue Code of 1986, 26 U.S.C. s.501.

���� (2)� The fee imposed by
subsection a. of this section shall not apply to a deed if the transfer of real
property is incidental to a corporate merger or acquisition and the equalized
assessed value of the real property transferred is less than 20 percent of the
total value of all assets exchanged in the merger or acquisition.� A grantor
shall claim this exemption from imposition of the fee at the time the deed is
offered for recording by filing with the county recording officer such
information, in addition to the affidavit of consideration filed by one or more
of the grantor parties named in the deed or by the grantor's legal
representative pursuant to subsection d. of this section, as the Director of
the Division of Taxation in the Department of the Treasury may prescribe as to
constitute a filing of a protest of the assessment of the fee and by paying any
other recording fees not exempted pursuant to this paragraph.� This additional
information shall be forwarded by the county recording officer to the director along
with the grantor's affidavit of consideration, and shall be deemed to be and
have the effect of a protest of a finding by the director of a deficiency of
payment of the fee filed on the date on which the deed is recorded.

���� (3)� The fee imposed by
subsection a. of this section shall not apply to a deed if the transfer of real
property is entered into on or after January 1, 2021 and is an intercompany
transfer between combined group members as part of the unitary business, as those
terms are used in section 4 of P.L.1945, c.162 (C.54:10A-4).

���� c.��� The fee imposed by
subsection a. of this section shall be subject to the provisions of the State
Uniform Tax Procedure Law, R.S.54:48-1 et seq., provided, however, that
notwithstanding the provisions of subsection a. of R.S.54:49-14, a taxpayer may
file a claim under oath for refund at any time within 90 days after the payment
of any original fee and that subsection b. of R.S.54:49-14 shall not apply to
any additional fee assessed.

���� d. (1) If a transfer includes
property classified pursuant to the requirements of N.J.A.C.18:12-2.2 as Class
4 property of any type, an affidavit of consideration shall be filed by one or
more of the grantor parties named in the deed or by the grantor's legal
representative declaring the consideration and shall be annexed to and recorded
with the deed as a prerequisite for the recording of the deed. The filing of an
affidavit of consideration pursuant to this paragraph shall be in addition to
the filing, if any, pursuant to paragraph (2) of this subsection.

���� (2)� Whether or not the
transfer is exempt, pursuant to subsection b. of this section or any other
provision of law, from payment of the fee pursuant to subsection a. of this
section, if a transfer includes property otherwise subject to subsection a. of
this section, then an affidavit of consideration shall be filed by one or more
of the grantor parties named in the deed or by the grantor's legal
representative declaring the consideration and shall be annexed to and recorded
with the deed as a prerequisite for the recording of the deed.� The filing of
an affidavit of consideration pursuant to this paragraph shall be in addition
to the filing, if any, pursuant to paragraph (1) of this subsection.

���� (3)� An affidavit of
consideration filed pursuant to paragraph (1) or paragraph (2) of this
subsection shall clearly and entirely state the consideration, the county and
municipality in which the property is situate, and the block and lot
description of the real property conveyed.

���� (4)� One copy of each
affidavit of consideration filed and recorded with deeds pursuant to this
subsection shall be forwarded by the county recording officer to the Director
of the Division of Taxation in the Department of the Treasury on the 10th day
of the month following the month of the filing of the deed.

(cf: P.L.2025, c.69, s.1)

���� 2.��� Section 2 of P.L.2006,
c.33 (C.46:15-7.4) is amended to read as follows:

���� 2.��� Notwithstanding the
provisions of section 8 of P.L.2004, c.66 (C.46:15-7.2), for the transfer of
real property that was made for consideration in excess of $1,000,000, provided
that the deed was recorded on or before
[
November
15, 2025,
]

July 1, 2026,
and that was transferred pursuant to a contract that was
fully executed before
[
July
10, 2025,
]

January 1, 2026,
any fee in excess of one percent of consideration
imposed pursuant to section 8 of P.L.2004, c.66 (C.46:15-7.2) shall have the
difference between the amount in excess of one percent of consideration and one
percent of consideration refunded to the grantor by the filing, within one year
following the date of the recording of the deed, of a claim with the New Jersey
Division of Taxation for a refund of the fee paid.� Proof of claim for refund
shall be made by the submission of such documentation as the Director of the
Division of Taxation may require.

(cf: P.L.2025, c.69, s.2)

���� 3.��� Section 3 of P.L.2006,
c.33 (C.54:15C-1) is amended to read as follows:

���� 3. �a. �(1) �(a) �There is
imposed and shall be paid a tax upon the sale or transfer for consideration in
excess of $1,000,000 of a controlling interest in an entity which possesses,
directly or indirectly, a controlling interest in classified real property,
which shall be paid by the seller of the controlling interest and which shall
be equal to
[
a
]

one

percent
[
,
as set forth in subparagraph (b) of this paragraph,
]
of the consideration paid on the
sale or transfer, provided, however, that in the case of the sale or transfer
of a controlling interest in an entity which possesses, directly or indirectly,
an interest in classified real property and an interest in other property, real
or personal, there shall be paid a tax upon the sale only if the equalized assessed
value of the classified real property exceeds $1,000,000 which shall be paid by
the seller of the controlling interest and which shall be equal to
[
a
]

one

percent
[
,
as set forth in subparagraph (b) of this paragraph,
]
of that percentage of the equalized
assessed value of the classified real property that is equal to the percentage
of the ownership interest transferred.

���� (b)�
[
The tax
imposed pursuant to this paragraph shall be in an amount equal to the following
percentage of the consideration paid on the sale or transfer or the equalized
assessed value of the classified real property, as applicable:

���� (i)�� if the consideration or
equalized assessed value, as applicable, exceeds $1,000,000, but is not in
excess of $2,000,000, one percent;

���� (ii)� if the consideration or
equalized assessed value, as applicable, exceeds $2,000,000, but is not in
excess of $2,500,000, two percent;

���� (iii) �if the consideration or
equalized assessed value, as applicable, exceeds $2,500,000, but is not in
excess of $3,000,000, two and one-half percent;

���� (iv) if the consideration or
equalized assessed value, as applicable, exceeds $3,000,000, but is not in
excess of $3,500,000, three percent; and

���� (v)� if the consideration or
equalized assessed value, as applicable, exceeds $3,500,000, three and one-half
percent.
]

(Deleted by amendment, P.L.���� , c.��� ) (pending before the Legislature as
this bill)

���� (2)� The sale or transfer of a
controlling interest subject to taxation pursuant to paragraph (1) of this
subsection may occur in one transaction or in a series of transactions.
Transactions which occur within six months of each other are presumed, unless
shown to the contrary, to be a series of transactions constituting a single
sale or transfer.

���� Sale or transfer of a
controlling interest subject to taxation pursuant to paragraph (1) of this
subsection may be accomplished by one purchaser or may be made by a group of
purchasers acting in concert.� Purchasers who are related parties are presumed,
unless shown to the contrary, to be acting in concert.

���� b.��� On or before the last
day of the month following the month in which the sale or transfer of a
controlling interest which is subject to the tax imposed by subsection a. of
this section is completed, the seller shall file a return with the director, in
such form as the director may prescribe.� Payment of the tax shall accompany
the return.

���� c.��� The tax imposed by
subsection a. of this section shall not apply to any sale or transfer:

���� (1)� by or to the United
States of America, this State, or any instrumentality, agency, or subdivision
thereof;

���� (2)� to a purchaser that is an
organization determined by the federal Internal Revenue Service to be exempt
from federal income taxation pursuant to paragraph (3) of subsection (c) of
section 501 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.501;

���� (3)� having the underlying
characteristics of the transactions enumerated in section 6 of P.L.1968, c.49
(C.46:15-10);

���� (4)� that is subject to the
fee imposed tax pursuant to section 8 of P.L.2004, c.66 (C.46:15-7.2);

���� (5)� that is incidental to a
corporate merger or acquisition if the equalized assessed value of the real
property transferred is less than 20 percent of the total value of all assets
exchanged in the merger or acquisition; or

���� (6)� entered into on and after
January 1, 2021 if it is an intercompany transfer between combined group
members as part of the unitary business, as those terms are used in section 4
of P.L.1945, c.162 (C.54:10A-4).

���� d.��� Notwithstanding the
provisions of subsection a. of this section, the transfer of a controlling
interest on or before
[
November
15, 2025
]

July 1, 2026
in an entity which possesses, directly or indirectly, an
interest in classified real property shall be subject to tax equal to one
percent of the consideration over $1,000,000 if the interest was transferred
pursuant to a contract or other binding agreement that was fully executed
before
[
July
10, 2025
]

January 1, 2026
.

���� e. (1) The director may
require all sellers subject to a tax imposed under this section to keep such
records as the director may prescribe, and the director may require the
production of books, papers, documents, and other data to provide or secure
information pertinent to the determination of the taxes imposed by this section
and the enforcement and collection thereof.

���� (2)� An entity with respect to
which there is a sale or transfer of a controlling interest in that entity,
shall keep a record of every transfer of a controlling interest in its stock or
in its capital, profits, or beneficial interests, as the case may be, and such
other information as the director may prescribe.� An entity shall report that
information to the director in such form and at such times as the director may
prescribe.

���� (3)� The director may examine
the books, papers, records, and equipment of an entity with respect to which
there is a sale or transfer of a controlling interest in that entity or of a
seller liable under the provisions of this section.

���� (4)� The director shall
collect and administer the tax imposed pursuant to this section. The director
is authorized to adopt rules and regulations to effectuate the purposes of this
section pursuant to the "Administrative Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.).

���� (5)� The director may extend,
for cause shown by general regulation or individual authorization, the time of
filing any return on such terms and conditions as the director may require, and
may, for cause shown, remit or waive penalties and interest as provided for in
the State Uniform Tax Procedure Law, R.S.54:48-1 et seq.

���� (6)� The director may delegate
the director's functions hereunder to any officer or employee of the director's
division such of the director's powers as the director may deem necessary to
carry out efficiently the provisions of this section.

���� f.���� The tax imposed
pursuant to this section shall be governed by the provisions of the State
Uniform Tax Procedure Law, R.S.54:48-1 et seq.

���� g.��� As used in this section:

���� "Classified real
property" means property that is classified pursuant to the requirements
of N.J.A.C.18:12-2.2 as Class 4A "commercial properties".

���� "Consideration"
means the actual amount of money and the monetary value of any other thing of
value constituting the entire compensation paid or to be paid for the transfer,
including the remaining amount of any prior mortgage to which the transfer is
subject or which is to be assumed and agreed to be paid by the purchaser.

���� "Controlling
interest" means, in the case of an entity that is a corporation, more than
50 percent of the total combined voting power of all classes of stock of that
corporation, and in the case of an entity that is a partnership, association, trust
or other organization, more than 50 percent of the beneficial ownership of
classified real property of that partnership, association, trust or other
organization.

���� "Director" means the
Director of the Division of Taxation in the Department of the Treasury.

���� "Related parties"
means parties that have the relationship necessary for attribution of
constructive ownership of stock pursuant to section 318 of the federal Internal
Revenue Code of 1986, 26 U.S.C. s.318, and members of an affiliated group or a
controlled group pursuant to section 1504 or 1563 of the federal Internal
Revenue Code of 1986, 26 U.S.C. s.1504 or 1563.

(cf: P.L.2025, c.69, s.3)

���� 4.��� This act shall take
effect immediately and shall apply to transfers of real property or controlling
interests occurring on or after the date of enactment.

STATEMENT

���� This bill reduces the amount
of the additional fees and taxes imposed on certain transfers of real property
for consideration in excess of $1 million.

���� Currently, an additional fee
is imposed on the seller of various categories of real property, including
residential property, commercial property, certain farm property, and
cooperative units, for consideration in excess of $1 million, as recited on the
deed.� The State also imposes a controlling interest transfer tax on certain
non-deed transfers of commercial property that are not subject to this
additional fee.� The controlling interest transfer tax is imposed on the seller
of a controlling interest in an entity that directly or indirectly owns certain
commercial property, provided that the consideration paid to acquire the
interest exceeds $1 million.

���� In July 2025, the State
enacted P.L.2025, c.69 to provide that the amount of the additional fee and a
controlling interest transfer tax is to be imposed according to a tiered
structure with rates ranging from one percent to three and one-half percent based
on the value of the property transferred.

���� This bill eliminates the
tiered fee structure established under P.L.2025, c.69 and imposes a uniform fee
rate of one percent for any transfer of real property in excess of $1 million,
which rate was imposed before the enactment of P.L.2025, c.69.� The bill also
allows certain sellers to apply to the Director of the Division of Taxation for
a refund of additional fee amounts paid in excess of one percent for certain
transactions.� Specifically, this refund would be permitted for any property
transfer in which the deed was recorded on or before July 1, 2026, and which
was transferred pursuant to a contract that was fully executed before January
1, 2026.