New Jersey's Mansion Tax Changed — What Westfield Sellers Need to Know in 2026

By Galina Kaplan | May 18, 2026

Most sellers I talk to are focused on two numbers: the asking price and the mortgage payoff. Everything in between — the commissions, the Realty Transfer Fee, the attorney, the taxes — tends to feel abstract until they're sitting at the closing table staring at the settlement statement.

In July 2025, New Jersey quietly changed one of those "in between" numbers in a way that affects nearly every seller in Westfield, Mountainside, Summit, Scotch Plains, and the surrounding Union County and Essex County towns. And based on the questions I've been getting, many sellers still don't know it happened.

Here's what changed, what it means for your bottom line, and how to plan for it before you list.

What New Jersey Changed About the Mansion Tax

Before July 10, 2025, if you sold a home for over $1 million in New Jersey, it was the buyer who paid the mansion tax — a flat 1% of the purchase price. A buyer buying your $1.5M home owed $15,000. Not your problem.

That changed with the new Graduated Percent Fee law, which Governor Murphy signed and made effective July 10, 2025. Starting on that date:

• The tax is now the seller's responsibility
• The flat 1% rate was replaced with a graduated scale ranging from 1% to 3.5%
• The rate applies to the full sale price — not just the amount above $1 million

The rate structure breaks down like this:

• $1,000,001 – $2,000,000 → 1%
• $2,000,001 – $2,500,000 → 2%
• $2,500,001 – $3,000,000 → 2.5%
• $3,000,001 – $3,500,000 → 3%
• Above $3,500,000 → 3.5%

That last point — that the rate applies to the entire sale price — catches people off guard. You don't pay 1% on the amount above $1M. You pay 1% on the whole thing. On a $1.45M sale, that's $14,500. On a $2.5M sale, that's $50,000.

One more important detail: there's no negotiating this fee away. The county clerk will not record the deed without it. It's paid at closing, full stop.

What This Looks Like for Westfield, Mountainside, and Summit Sellers

Let's put some real numbers on this. Westfield's current median sale price is approximately $1.45 million. Mountainside's median runs around $975,000 to $1.07 million. Summit clusters around $1.25M to $1.5M. In all three markets, the vast majority of single-family home sales clear the $1 million threshold.

Here's what the Graduated Percent Fee looks like at several common price points in this area:

• $1.2M sale: $12,000 in GPF
• $1.45M sale (Westfield median): $14,500 in GPF
• $2M sale: $20,000 in GPF
• $2.5M sale: $50,000 in GPF (2% on full $2.5M)
• $3.5M sale: $87,500 in GPF (2.5% on full $3.5M)
• $4M sale: $140,000 in GPF (3.5% on full $4M)

Those higher-tier numbers represent a dramatic shift. Under the old law, a buyer purchasing a $4M home paid $40,000 in mansion tax. Under the new law, the seller pays $140,000 — more than three times as much, and now coming out of your proceeds instead of the buyer's pocket.

I've seen the automated valuation gap catch sellers off guard — where the Zestimate says one thing and the real net says something much different. The mansion tax change is another layer on top of that. If you're basing your plan on last year's information, or on what a neighbor told you they netted, the number you're working with may be off by tens of thousands of dollars.

The Full Picture: Everything Sellers Pay at Closing in NJ

The Graduated Percent Fee is the new addition, but it doesn't exist in isolation. Here's the complete picture of what sellers in Westfield and the surrounding towns pay at closing:

Realty Transfer Fee (RTF)
This is New Jersey's base real estate transfer tax, paid by the seller. The rate is tiered — roughly 0.8% of the sale price on most transactions above $350,000. On a $1.45M sale, you're looking at approximately $8,700–$9,500 in RTF.

Graduated Percent Fee (Mansion Tax)
As described above — 1% to 3.5% of the full sale price, paid by seller, effective July 10, 2025.

Agent Commissions
The statewide average runs around 5.2% total (typically split between the listing agent and buyer's agent, though structures vary). On a $1.45M sale: approximately $75,400.

Real Estate Attorney
In New Jersey, you need a real estate attorney. (This is not optional — the state requires an attorney review period in every residential transaction.) Attorney fees typically run $1,000–$2,500 for standard closings.

Prorated Property Taxes
You'll pay your share of property taxes through the closing date. Depending on the timing and your tax rate, this can run $4,000–$15,000 or more.

Nonresident Seller Withholding
If you no longer live in New Jersey (renting out the property, relocated, etc.), the state requires a minimum 2% withholding at closing toward estimated NJ income tax. On a $1.45M sale, that's $29,000 held at closing — you'll file a return and recover what you overpaid, but it's a real cash flow consideration at the time of closing.

When you add it all up for a median Westfield sale around $1.45M, the total deductions — before your mortgage payoff — run roughly $120,000 to $145,000, or 8–10% of the sale price.

Every situation is different. Your mortgage balance, your specific commission arrangement, your closing timing, and whether you're a NJ resident all affect the exact number. This is precisely why I run a personalized net sheet for every seller before we set a list price — so there are no surprises at the closing table.

What This Means for How You Should Be Planning

If you're thinking about selling in 2026 — in Westfield, Scotch Plains, Cranford, Berkeley Heights, or anywhere in Union County or Essex County — here's what to do with this information:

1. Get your net proceeds calculated before you pick a list price. The goal isn't a high sale price in isolation — it's a high net after everything. Knowing your costs upfront lets you set the right price to hit your actual financial target. If you need to walk away with $X, the list price has to account for 8–10% in transaction costs, not just commissions.

2. Factor in the rate cliff at $2M and $2.5M. If your home could plausibly sell in the $1.95M–$2.1M range, or the $2.4M–$2.6M range, talk to your agent about the implications. The GPF rate jumps at these thresholds — on the full sale price — which can affect your net proceeds and your pricing strategy in ways that aren't obvious at first glance.

3. If you signed a contract before July 10, 2025 and closed before November 15, 2025 — this law did not apply to you. If you have a deal in process right now, the new rates apply. Work with your attorney to confirm exactly what you'll owe at closing.

The Westfield market remains exceptionally competitive — homes are selling in a median of 19–23 days, and the average sale-to-list ratio is around 103%. The spring 2026 market has continued that pattern. Seller conditions are still strong. But strong market conditions don't change what you'll write a check for at the closing table — and knowing those numbers in advance is the difference between a plan and a surprise.