Free Tax Tool
NJ Exit Tax Calculator
Estimate your NJ exit tax withholding, actual tax liability, potential refund, and net proceeds when selling New Jersey real property. Includes the new Mansion Tax rates effective July 2025 and Section 121 exclusion logic.
Key Facts
- •The withholding is collected at closing before the deed can be recorded (N.J.S.A. 54A:8-10)
- •Section 121 exclusion: $250,000 (single) or $500,000 (MFJ) for a primary residence owned and used 2+ of the last 5 years
- •NJ conforms to the federal Section 121 exclusion per N.J.S.A. 54A:6-9.1
- •Part-year residents are treated as nonresidents for GIT/REP purposes (per GIT/REP-3 instructions and TB-57(R))
- •Refunds are claimed on NJ-1040NR or via Form A-3128 (4 to 12 weeks processing)
- •Entities (corporations, LLCs, partnerships) file GIT/REP-3 Box 5 with no withholding at the entity level
NJ Exit Tax Calculator
Enter your property sale details below. All calculations run in your browser.
The total consideration stated in the deed.
Additions, renovations, new systems (not repairs). These increase your basis.
Lived in the home 2+ of the last 5 years?
Required for the IRC Section 121 exclusion ($250K single / $500K MFJ).
Used only for net proceeds calculation, not for tax computation.
Auto-calculated at 6% of sale price. Override below if you know the exact amount.
Using estimate: $39,000
Are you staying in New Jersey?
NJ residents file GIT/REP-3 and owe nothing at closing.
Example: Primary Residence Sale (2026)
| Detail | Amount |
|---|---|
| Sale price | $650,000 |
| Original purchase price | $350,000 |
| Selling costs (6%) | $39,000 |
| Gross gain | $261,000 |
| Section 121 exclusion (single, $250K) | $250,000 |
| Taxable gain | $11,000 |
| Option A: 2% of sale price | $13,000 |
| Option B: 10.75% of taxable gain | $1,183 |
| Withholding at closing (greater of A or B) | $13,000 |
| Actual NJ tax (graduated brackets) | $154 |
| Estimated refund | $12,846 |
This example shows a single filer selling a primary residence for $650,000 with a $350,000 basis. The $261,000 gross gain is mostly covered by the $250,000 Section 121 exclusion, leaving only $11,000 taxable. The seller owes the 2% minimum ($13,000) at closing but would receive approximately $12,846 back when filing NJ-1040NR. A married couple filing jointly with a $500,000 exclusion would owe $0 at closing by filing GIT/REP-3 (Box 2). Schedule a free consultation for your exact numbers.
NJ Mansion Tax Rates (P.L. 2025, c.69)
The Graduated Percent Fee applies to sales over $1,000,000 for residential, commercial, and cooperative properties. Effective July 10, 2025, the fee shifted from buyer to seller. These are cliff rates applied to the entire sale price, not marginal rates.
| Sale Price | Rate | Example Fee |
|---|---|---|
| $1,000,001 to $2,000,000 | 1% | $15,000 on a $1.5M sale |
| $2,000,001 to $2,500,000 | 2% | $45,000 on a $2.25M sale |
| $2,500,001 to $3,000,000 | 2.5% | $68,750 on a $2.75M sale |
| $3,000,001 to $3,500,000 | 3% | $97,500 on a $3.25M sale |
| Over $3,500,000 | 3.5% | $175,000 on a $5M sale |
N.J.S.A. 46:15-7.2 as amended by P.L. 2025, c.69 (S4666/A5804), signed June 30, 2025. Applies to Class 2 (residential), Class 3A (farm with residential structures), Class 4A (commercial), and Class 4C (cooperatives). Does not apply to vacant land, industrial property, or apartments with 5+ units.
How the NJ Exit Tax Works
The NJ "exit tax" is an estimated Gross Income Tax prepayment required under N.J.S.A. 54A:8-8 through 54A:8-10 when a nonresident individual, estate, or trust sells New Jersey real property. Enacted by P.L. 2004, c.55, this mechanism ensures NJ captures tax on property gains from sellers who leave the state and might never file a NJ return.
The withholding equals the greater of 10.75% of the estimated gain (using the highest GIT rate under N.J.S.A. 54A:2-1) or 2% of the total consideration stated in the deed. This is not a choice between two options. The 2% is a statutory minimum floor. Even sellers with no gain must pay the 2% minimum and seek a refund afterward, unless they qualify for an exemption or obtain a GIT/REP-4 waiver.
Withholding vs. Actual Tax
The 10.75% withholding rate is the highest marginal bracket, not the effective rate. Most sellers owe far less in actual NJ income tax because the graduated GIT brackets start at 1.4%. The difference between what is withheld at closing and what is actually owed is refunded when the seller files NJ-1040NR. Refunds typically take 4 to 12 weeks after filing.
The Section 121 Exclusion
NJ conforms to the federal Section 121 principal-residence exclusion per N.J.S.A. 54A:6-9.1. If you owned and used the property as your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). If the entire gain is excludable, you file GIT/REP-3 (Box 2) at closing with no payment required.
If your gain exceeds the exclusion, you can still file GIT/REP-3 (Box 2) and make estimated payments via NJ-1040-ES for the taxable portion after recording. Alternatively, you can file GIT/REP-1 with the full withholding and claim a refund for the excluded portion on NJ-1040NR.
Who Is Exempt from Withholding?
NJ residents file GIT/REP-3 (Box 1) and owe no estimated payment at closing. Entities (corporations, partnerships, LLCs) file GIT/REP-3 (Box 5). The GIT/REP-3 form includes 16 exemption boxes covering scenarios from principal residence sales to 1031 exchanges, foreclosures, divorce transfers, and military deployments. Sellers with a capital loss who do not qualify for any exemption box can apply for a GIT/REP-4 waiver at least 14 days before closing.
Part-Year Residents
Part-year residents are treated as nonresidents for GIT/REP purposes. If you move out of NJ on or after the day of transfer, you cannot check Box 1. A seller who closes on their NJ home on the same day they leave the state is treated as a nonresident for the GIT/REP filing.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, I inform you that any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.