A new tax on New Jersey home sales

From NJBIZ:

Battling a New Levy On Home Sellers

The New Jersey Association of Realtors (NJAR) has launched a $500,000 advertising and information campaign to protest legislation that would allow municipalities to assess their own fees on the sale of homes. Such fees would be on top of the realty transfer tax that the state now levies on home sellers.

“The state has already increased its realty transfer tax over 80 percent since 2003,” says Jarrod C. Grasso, vice president of government affairs for NJAR. “We cannot allow this tax to be increased further. We will not allow it to be increased further and we will continue fighting on behalf of homeowners.”

Grasso says the 55,000-member association fears that the proposed legislation could “slip through” the lame duck session—the period between election day and early January before the start of the new Legislative session.

Patrick O’Keefe, CEO of the New Jersey Builders Association, also opposes the bills. “It is yet another cost at a time when housing affordability is a barrier to working families,” says O’Keefe. “It’s an ill-advised and ill-timed proposal.”

Five bills have been introduced in the Legislature that would allow municipalities to charge home sellers 50 cents per $500 of their home’s sales price.

The current realty transfer fee assessed by the state—the NJAR calls it a “home sales tax”—is $2,799 on a home sold for $356,700, according to the realtors. The proposed local tax would add 13 percent, or $364, bringing the total to $3,163.

“The Legislature looks to increase the transfer tax because they believe it’s a tax people won’t notice until they sell their homes,” says Grasso. “But that is a crucial time. People use their equity to bankroll their next purchase or their retirement.”