New Jersey Legislative SRO, NJ – A new bill aims to exempt property sellers from a recently implemented sales tax if their contracts were finalized before the law took effect.
Sen. Declan O’Scanlon introduced the measure to preserve agreements made ahead of the tax change.
The proposal would allow eligible sellers to seek refunds on portions of fees paid under the updated system.
Key Points
- Bill would grandfather sellers with contracts executed before July 10 under prior tax rules
- Refunds would apply to fees exceeding one percent of consideration
- O’Scanlon says the measure protects agreements in place before the tax update
O’Scanlon said the legislation was designed to uphold commitments made between buyers and sellers prior to the adoption of the new fee structure. He noted that contracts executed before the law’s effective date should not be subject to additional charges created after the fact. The proposal, filed as S-4857, would retroactively apply to transactions tied to contracts fully executed before July 10.
The bill amends existing law governing fees on transfers of real property valued above $1 million. Under the measure, sellers who paid fees above one percent of consideration would be permitted to file refund claims with the Division of Taxation within one year of recording their deed.
The legislation outlines documentation requirements for refund applications and directs the division to determine eligibility based on proof submitted. It would modify recent statutory changes that increased the fee through a tiered schedule dependent on transaction value.
Senate staff released a statement accompanying the bill explaining that the measure is intended to ensure sellers are not assessed charges under rules that were not in place when their contracts were signed. The statement summarizes current fee levels beginning at one percent for transfers above $1 million and increasing incrementally at higher price thresholds.
Lawmakers will review the proposal as part of broader discussions on the state’s property transfer fee structure.