TRENTON, N.J. – A new proposal from Senator Carmen F. Amato Jr. (R-Ocean) seeks to undo New Jersey’s recently enacted tiered tax system on high-value real estate transfers, restoring a single flat rate on all property sales exceeding $1 million. The bill, co-sponsored by Senator Kristin Corrado (R-Passaic), would return the so-called “mansion tax” to its former 1 percent rate — reversing a 2025 law that increased fees based on escalating property values.
Under Senate Bill (S-number pending assignment), introduced for the 2026–2027 legislative session, the tiered fee structure adopted last year under P.L.2025, c.69 would be repealed. That law created a progressive tax on real estate transactions exceeding $1 million, with rates ranging from 1 percent to 3.5 percent depending on the sale price.
Amato’s bill would eliminate those tiers and standardize the fee at 1 percent of the property’s total consideration — regardless of value — applying the same flat rate to residential, commercial, farm, and cooperative property transfers. The change would also extend to controlling interest sales of entities holding high-value real estate, such as commercial properties sold through corporate ownership transfers.
Refunds for pending transactions
The legislation provides a limited refund window for sellers who paid higher rates under the new tiered system. Property owners whose transactions were recorded on or before July 1, 2026, and who signed contracts before January 1, 2026, could apply for a refund of any amount paid above the 1 percent rate. Refund claims must be filed with the Division of Taxation within one year of the deed’s recording.
“This bill reduces the additional fees and taxes imposed on certain transfers of real property for consideration in excess of $1 million,” Amato’s statement reads. “It restores fairness and predictability to the real estate market by returning to the pre-2025 rate that worked for years.”
Background on the 2025 tiered law
The tiered “mansion tax” structure was enacted in mid-2025 as part of a broader state budget agreement intended to raise revenue from high-end real estate transactions. It applied to residential properties, commercial assets, and certain farm properties valued over $1 million. Rates climbed as high as 3.5 percent on sales exceeding $3.5 million.
Critics, including real estate professionals and property developers, argued that the changes discouraged investment and could drive large transactions — particularly commercial and mixed-use projects — out of state. Amato, who represents coastal communities with both luxury and mid-market real estate activity, said the new law placed an unfair burden on sellers in high-cost regions.
Details of the proposal
Under Amato’s bill:
- All property transfers over $1 million would be taxed at a flat 1 percent rate.
- The controlling interest transfer tax on commercial ownership entities would also revert to 1 percent.
- Sellers qualifying under transition rules could seek refunds for excess payments made during the short-lived tiered tax period.
- The law would take effect immediately upon enactment and apply to transfers occurring on or after that date.
Legislative outlook
If passed, the measure would effectively roll back one of the state’s most significant recent revenue-generating changes in property taxation. The proposal is likely to spark debate in Trenton between fiscal conservatives advocating tax stability and lawmakers who supported the 2025 increase as a way to fund housing and public infrastructure projects.
Senator Amato, a former Ocean County freeholder and longtime advocate for lowering property taxes, said his bill aims to “make New Jersey’s real estate climate competitive again” by simplifying the tax code and reducing transaction costs for sellers statewide.