15 Apr Will I pay exit tax or transfer tax when I sell my home?
Q. I am going to be selling my principal residence in N.J. I’ve lived here since 1993. Do I have to pay the exit tax or a transfer tax? We may buy or rent out-of-state.
A. There’s not really an exit tax in New Jersey.
It’s actually the prepayment of an estimated tax that could be due on the sale of your home.
The state requires that either 8.97% of the net gain from the sale or 2% of the consideration.
That’s the so-called exit tax.
But you can get the money back when you file your non-resident New Jersey tax form. If you don’t want to wait, you can file a Form A-3128 to claim an early refund after the closing, along with proof of overpayment.
New Jersey also imposes realty transfer fee, which is sometimes called a “transfer tax” on the transfer of title of real property, said Jonathan Donenfeld, a certified public accountant with JLD Tax & Accounting in Jersey City.
“The fee is imposed on the seller,” he said. “The fee depends on the sale price, and for all sales under a million dollars it’s under 1%. There are different fee levels depending on the price of the sale.”
You can see how the rates are calculated here on the state’s website.
Senior citizens can get a break, paying a lower fee.
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This story was originally published on April 15, 2020.
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