17 Jul Will we owe the exit tax when we sell our condo?

Q. We want to sell our condo that we have for 10 years. We bought it for $200,000 and we think we can get $350,000. We then want to move to South Carolina. Will we have to pay an exit tax?
— Heading south

A. We’re sorry to see you’re leaving New Jersey.

There are a few things to consider.

Regardless of whether you move within Garden State or move to the Palmetto State, there will be no tax — federal or state — incurred on the sale of your condo, said Neil Becourtney, a certified public accountant and tax director with Smolin, Lupin & Co. in Red Bank.

That’s because you qualify for a full exclusion of the gain realized, he said.

“When a taxpayer sells their principal residence that they both owned and used for at least two of the preceding five years, they get to exclude from income up to $250,000 of gain in all circumstances, and if a joint filer, the amount is $500,000,” Becourtney said.

Your reference to “exit tax” is somewhat inaccurate.

When a nonresident taxpayer sells real property located in New Jersey, at closing, they are required to make an estimated tax payment equal to the lesser of the gain multiplied by the top personal income tax rate of 10.75% or 2% of the gross proceeds, Becourtney said.

“This protects the state from a nonresident taxpayer selling New Jersey real estate at a gain and choosing not to file a nonresident tax return,” he said. “However, if there is no taxable gain due to the principal residence exclusion then this payment is not required.”

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This story was originally published in July 2025.

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