Bill
Bill > S3841
NJ S3841
NJ S3841Increases threshold for imposition of certain fees and taxes on certain real property transfers from $1 million to $1.5 million, subject to annual adjustment based on Consumer Price Index.
summary
Introduced
10/28/2024
10/28/2024
In Committee
10/28/2024
10/28/2024
Crossed Over
Passed
Dead
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill raises the imposition threshold from $1 million to $1.5 million for the one percent "Mansion Tax" on real property transfers, with future adjustments tied to inflation. Currently, an additional one percent fee is applied to various types of property transactions, including residential, commercial, certain farm properties, and cooperative units, if the sale price exceeds $1 million. There is also a tax on transfers of controlling interests in entities that own commercial property, with this tax applying when the property's value exceeds $1 million as well. This bill increases the threshold for both the additional fee and the controlling interest transfer tax from $1 million to $1.5 million, beginning 30 days after the date of enactment of the bill. Beginning on the July 1 of each subsequent year, the bill provides for the annual adjustment to this threshold amount based on the percent change in the Consumer Price Index over the 12-month period, beginning April 1 and ending March 31, immediately preceding the period in which the adjustment would apply. Under the bill, the Director of the Division of Taxation in the Department of the Treasury would be required to determine and publish the amount of the adjustment, together with the threshold amount for the imposition of tax, by no later than May 1 of each year the threshold will be adjusted annually based on inflation, using the Consumer Price Index to reflect the rising costs of living. The Director of the Division of Taxation will be responsible for determining and publishing the new threshold by May 1 each year. Specifically, the bill defines the "Consumer Price Index" as the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas, as reported by the United States Department of Labor.
AI Summary
This bill increases the threshold for the "Mansion Tax" and controlling interest transfer tax from $1 million to $1.5 million, with an important provision for annual inflation adjustments. Specifically, the bill modifies two existing taxes: a 1% fee on real property transfers and a 1% tax on transfers of controlling interests in entities owning commercial property. Beginning 30 days after enactment, the tax threshold will rise from $1 million to $1.5 million, and starting each subsequent July 1st, the threshold will be automatically adjusted based on the Consumer Price Index (CPI). The CPI is defined as the average annual percentage increase in consumer prices for urban consumers in the New York City and Philadelphia metropolitan areas, as reported by the U.S. Department of Labor. The Director of the Division of Taxation will be responsible for calculating and publishing the new threshold amount by May 1st each year, ensuring that the tax thresholds keep pace with inflation. This change applies to various property types, including residential properties, farm properties with residential structures, cooperative units, and commercial properties, aiming to provide some relief to property owners by raising the point at which these additional taxes are triggered.
Committee Categories
Housing and Urban Affairs
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 10/28/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/S3841 |
| BillText | https://pub.njleg.gov/Bills/2024/S4000/3841_I1.HTM |
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