Home Selling in Somerset>Question Details

Bask, Home Seller in Haddon Heights, NJ

I am a florida resident with a 2nd home in New Jersey. When I sell the home in New Jersey; will there be NJ taxes that I pay.?

Asked by Bask, Haddon Heights, NJ Fri Jun 17, 2011

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I answered the question once before as someone was asking about an "exit tax" and after reserach to clarify, I came up with an answer. Although, I can not guarantee the response, but it is my interpretation. You should contact a local attorney here in NJ as the attorney will be the one collecting the tax. The explanation and how to go about a refund or partial refund or discussion about a refund .. your attorney would know about.

The tax is not a special or additional tax. NJ Law requires that non-resident individuals who sell or transfer real property located in New Jersey make a NJ Gross Income Tax estimated tax payment on the gain as a condition of the recording of the deed.

The state Division of Taxation has "amended" their position that, in order to utilize the Resident form, the seller MUST be moving to a New Jersey address as of the date of deed transfer, or they must use the Non-Resident (GIT/REP1) form, thereby requiring them to pay the minimum 2% of the deed consideration directly to the state.

The tax payment is determined by multiplying the gain on the sale by the top NJ tax rate of 8.97%. The payment cannot be less than 2% of the "consideration" received - or gross proceeds from the sale.

This is not an "exit tax", but an estimated tax payment. The purpose is to make sure that the non-resident individual files a Form NR-1040 to report the sale and pay tax on the gain. Because the required estimated Tax payment is made at the highest tax rate, the individual should receive and be entitled to a refund on the NJ-1040.
1 vote Thank Flag Link Mon Jun 20, 2011
Hello Bask,
As others have said earlier, there is a real estate transfer tax involved in the sale. here is a link to FAQ's regarding the tax and who pays: http://www.state.nj.us/treasury/taxation/lpt/rtffaqs.shtml

Also, here is a calculator to figure out how much the tax would be: http://www.state.nj.us/treasury/taxation/lpt/rtffaqs.shtml

If I may be of further help, don't hesitate to contact me directly.
0 votes Thank Flag Link Sat Jun 25, 2011
In NJ, real estate transfer fees (tax) are paid by the buyer. Seller can help to pay them, but it's not required.
0 votes Thank Flag Link Fri Jun 17, 2011
Dear friend,
Yes, if you sell the house in NJ, there will be a NJ tax.
0 votes Thank Flag Link Fri Jun 17, 2011
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