How the New NJ Mansion Tax Could Cost South Jersey Home Sellers

If you’re planning to sell your home in South Jersey and your price tag tops $1 million, you could soon face a hefty new tax bill. For example, a homeowner listing a $3.5 million property might be looking at over $47,000 in taxes under New Jersey’s newly revised mansion tax rules.

But this isn’t just an issue for luxury estates in “high-end” locations. Rising home values across South Jersey mean more everyday sellers are now crossing that million-dollar mark—sometimes simply because of market appreciation.

Million-Dollar Homes Are No Longer Just Mansions

Since 2019, the number of homes selling for $1 million or more in New Jersey has more than doubled—from just under 4,800 to nearly 10,900 in 2024, according to Realtor.com® data. And momentum continues: over 2,500 such properties have already sold in the first quarter of 2025.

That trend is visible in South Jersey communities like Haddonfield, Moorestown, Cherry Hill, and popular shore towns, where strong demand and limited inventory have driven prices higher than many longtime owners ever expected.

What’s Changed with the Mansion Tax

Before July 10, 2025, New Jersey’s mansion tax was straightforward: a 1% fee on home sales above $1 million, typically paid by the buyer. Now, the state is flipping the script.

Under the new rules, sellers—not buyers—are responsible for the tax. And it’s no longer a flat rate. The tax is now tiered, ranging from 1% to as much as 3.5% on portions of the sale price over $1 million. For instance, selling a $3.5 million home could mean owing over $47,000 in taxes—nearly double the cost under the old system.

This change is part of New Jersey’s $58.78 billion fiscal year 2026 budget, which anticipates raising over $550 million annually for projects like affordable housing, shore protection, and other public programs.

A Growing Concern for Longtime South Jersey Residents

For homeowners who’ve lived in their properties for years—especially retirees or empty nesters in towns like Medford, Marlton, or Cape May—this tax can feel like an unfair penalty for deciding to downsize or move closer to family.

Unfortunately, the mansion tax isn’t deductible on federal tax returns, despite hopes that an expanded SALT deduction might soften the blow. Worse, sellers could face capital gains taxes on home equity if their gains exceed federal exclusion limits—a problem for many homeowners whose property values have surged.

Why South Jersey Sellers Shouldn’t Panic

While the new tax sounds daunting, it’s important to keep things in perspective. For many sellers, the gains in home equity over the past several years have far outpaced the additional tax costs—even after accounting for this new expense.

Consider this: A home that has appreciated by hundreds of thousands—or even millions—of dollars since purchase still leaves most sellers with significant profit after taxes. And while $47,000 sounds like a lot, it’s often a relatively small percentage of the overall sale proceeds on high-value homes.

Plus, South Jersey remains a highly desirable market, with strong buyer demand. Well-priced, well-presented homes are still selling quickly, and sellers often have room to negotiate terms that help offset new costs.

With the right strategy, this tax doesn’t have to derail your plans—or your financial goals.

How South Jersey Sellers Might Reduce the Impact

While there’s no way to fully avoid the new tax if your sale exceeds $1 million, there are some ways to help ease the sting:

• Negotiate with Buyers: Some sellers may try to split the tax costs with buyers.

• Price Strategically: Listing just below key price thresholds could help avoid higher tax tiers.

• Adjust Contracts: Early discussions with your real estate agent or attorney might reveal contract strategies to mitigate costs.

Whether these tactics will hold up over time remains to be seen, but they’re worth exploring if you’re preparing to sell.

Selling a Home in South Jersey? Start Planning Now

If you’re considering listing your million-dollar home in South Jersey, the most important step is to plan ahead. The Zielinski Real Estate Group can help you with all your questions to start planning the successful sale of your home! Understanding how the mansion tax applies—and how much it could cost—is crucial for avoiding surprises at the closing table. Get in touch with us today and we can start answering all your important questions!

In addition to starting now with your real estate agent, you may want to consult a tax professional and attorney to explore strategies that might reduce your liability. In a market where even everyday homes can cross the million-dollar threshold, being proactive could save you tens of thousands of dollars.

As New Jersey enters this new era of mansion taxation, South Jersey sellers who stay informed and plan carefully will be best positioned to protect their bottom line.