By Andy Mulvihill, NJPI Board Chairman
New Jersey isn’t known for being an easy place to build or invest—but somehow, lawmakers have found a way to make it even harder.
Tucked into the state’s new budget is a steep increase in the realty transfer fee for property sales. Under the new law, any property sale over $2 million will be subject to a tiered realty transfer fee, with the rate increasing as the sale price goes up. Transactions between $2 million and $2.49 million will now be taxed at 2%. That rate rises to 2.5% for sales between $2.5 million and $2.99 million, and to 3% for transactions in the $3 million to $3.49 million range. For deals exceeding $3.5 million, the fee climbs to a steep 3.5%. The new structure also shifts the burden onto the seller—often long after the original investment decision was made.
These fees might sound abstract, but the math is simple: a 3.5% bite off the top can turn a viable deal into a nonstarter. If you’re targeting a 12% return—already tight in today’s climate—this tax means your project now has to perform closer to 15.5% just to stay on track.
Many states don’t impose these kinds of fees at all. The few that do generally keep them under 1%. New Jersey’s approach isn’t just aggressive—it’s out of step with every competitive market we’re trying to keep up with.
This isn’t just about glass towers and corporate offices. Everyday deals—strip malls, multifamily properties, even modest residential developments—are routinely above the $2 million mark. That’s the nature of building in New Jersey. The new fees will penalize builders, property owners, and small business owners alike.
For those of us who took on the risk, put capital to work, navigated local approvals, and created long-term value in the state, this tax is a slap in the face. It wasn’t there when we started. But it’ll be waiting for us on the way out.
The message this sends to developers is loud and clear: if you succeed in New Jersey, the state will make sure to take more on the back end. That’s not just short-sighted—it’s a deterrent.
Instead of creating a stable, competitive environment, Trenton is adding one more reason to pass on New Jersey in favor of friendlier markets. And for those of us who have spent years building here, that’s a frustrating and deeply disappointing shift.
