Understanding the Realty Transfer Fee (RTF)

The Realty Transfer Fee (RTF) was established in New Jersey in 1968 to offset the costs of tracking real estate transactions. Upon the transfer of the deed to the buyers, the seller pays the RTF, which is based on their property's sales price.

Payment of the RTF is a prerequisite for recording the deed, and it should be noted that in addition to the transfer fee paid by the sellers, a 1% fee must be paid by the buyer on all transactions over $1,000,000 in all commercial and residential property classes. This means that the seller must pay 1% of the sales price upon recording the deed. The RTF is usually collected at the real estate closing by the legal representatives or title insurance agents responsible for recording the deed at the county registry offices. Funds from the RTF are then shared between the state and counties.

The state portion of the revenue is allocated to neighborhood revitalization, shore protection, and the state's general fund. The counties are responsible for the disbursement of their portion of the revenue. The RTF does not apply to sales for less than $100, or those transactions made between husbands and wives or parents and children. Senior citizens, blind or disabled persons, and low-and moderate-income housing continue to be exempt from the state portion of the basic fee. An Affidavit of Consideration must be filed with any deed in which a full or partial exemption is claimed from the RTF.

It's also worth mentioning that the realty transfer fee is just one of several closing costs that buyers and sellers may incur during a real estate transaction in New Jersey. Other closing costs may include attorney fees, title insurance, and appraisal fees. The tax rate is based on the sale price of the property and can vary depending on the county where the property is located.

For more information on the Realty Transfer Fee (RTF) please visit : Division of Taxation - Realty Transfer Fees (RTF) Frequently Asked Questions