Home Selling in Middletown>Question Details

Stacey, Home Buyer in Lincroft, NJ

Will I be required to pay any tax on the sale of my primary residence in Middletown NJ?

Asked by Stacey, Lincroft, NJ Fri Jul 5, 2013

I am selling my primary residence in Middletown NJ where my family and I have lived for almost three years.

I will be staying in NJ for the next few months after closing and then moving out of state.

I file my taxes jointly with my wife and our profit from the sale is less than $500,000.

Will I be required to pay taxes on the sale?

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Answers

6
Joan Congilose CRS,CDPE,GRI’s answer
You really should check with your attorney as well as a tax consultant what your actual expenses will be at closing. All homeowners pay a real estate transfer tax when you sell a home and the rate charged will he determined by the sales price and your age. In addition, you may be required to pay an exit tax if your plan is to move out of the state shortly after the sale of your home.
0 votes Thank Flag Link Sun Jul 21, 2013
You will have to pay a transfer tax unless your agent negotiated that tax be paid by the buyer. Traditionally the transfer tax in NJ is 100% on the seller unless the sales price exceeds $1,000,000.00. Then the buyer pays an additional tax on top of the seller paying the transfer tax. You should speak with your agent or the title company handling your sale. They can give you an exact figure for the transfer tax cost.
0 votes Thank Flag Link Mon Jul 8, 2013
I guess my question really should have included that I don't understand what the "transfer" tax is.

Is the transfer tax the same as the income tax for which I am exempt or do I still have to pay that? I have read different estimates from between 1 and 2% which will be quite substancial so I am hoping that this is also exempt (or the same thing).

I understand that I am exempt from Federal tax on the sale but don't know about any other taxes.
0 votes Thank Flag Link Sun Jul 7, 2013
It does matter in NJ whether you stay in state or not for State taxes. NJ has an "exit" tax. If you have been a resident of NJ and you are selling your primary home (or any property in NJ) and you don't show a NJ as your new address the title company will have to withhold a certain amount of taxes as an exit tax. So, be sure to give the property address where you will be stayin in NJ post closing or use a family member's address.

As far as Federal income taxes the rule is if you have lived in the property for any 2 of the last 5 years you can exclude up to $500k in GAIN not sales price but gain from you federal income tax.

It is not a 1 time deal. It used to be but under Clinton he set this up so you can do this every 2 years and avoid Federal income taxes on the gain from the sale of your primary home.
0 votes Thank Flag Link Fri Jul 5, 2013
As stated you get an exemption from the sale of you primary residence 1 time.
Check with your accountant if you qualify.
there will be a transfer fee tax on the HUD that you will pay at closing.
Also check with your accountant if your state will give you an exemption from any state tax.
0 votes Thank Flag Link Fri Jul 5, 2013
It does not matter that you stay in the same state. You should be able to exclude up to $500k in gains from the sale of your primary residence. If you had a similar exemption prior that might make a difference, I am not a tax professional so you should ask one.
0 votes Thank Flag Link Fri Jul 5, 2013
Thank you Tim for the response. I guess my question really should have included that I don't understand what the "transfer" tax is.

Is the transfer tax the same as the income tax for which I am exempt or do I still have to pay that? I have read different estimates from between 1 and 2% which will be quite substancial so I am hoping that this is also exempt (or the same thing).
Flag Fri Jul 5, 2013
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