In New Jersey, since 2004, buyers of homes purchased for more than $1 million have been paying a fee on their purchase—the so-called “mansion tax.” The fee scales up based on the sales price of the property.
As property values have increased throughout the state, the “mansion” moniker has become less accurate, according to Douglas Tomson, CEO of New Jersey REALTORS®. “In many parts of the state, these are starter homes. We see a lot of young families looking to buy and stay in their communities that simply can’t afford an additional $10,000 or more added to their closing costs,” says Tomson.
In February of this year, when New Jersey Governor Phil Murphy released a proposed increase in the tax as part of his fiscal year 2026 budget plan, NJ REALTORS® immediately released a public statement voicing their opposition to the proposal. According to research from NJ REALTORS®, nearly 20% of homes sold in New Jersey would have been impacted by the governor’s proposal.
And the association didn’t just oppose the measure; it launched a campaign that brought consensus and real results for affordability-challenged buyers.
A Multipronged Approach
NJ REALTORS® used several funding sources, including a grant from the National Association of REALTORS® and their own internal funding, to develop a campaign that supplemented their direct advocacy efforts with elected officials and leaders in New Jersey.
“We were able to really effectively leverage the three-way agreement between NAR, NJR and our local associations to build out this campaign,” Tomson says. “The three-way agreement lets each level of the association work where we’re most effective.”
Over a four-month period, NJ REALTORS® concentrated on securing meetings with key elected officials and legislative leadership, while simultaneously launching a robust call-to-action campaign aimed at both members and consumers. The goal: to ensure every state legislator heard directly from those most impacted about the harmful consequences of increasing this tax.
The final piece in their work came just seven days before the state budget deadline, when NJ REALTORS® was able to secure a meeting between state officials and NAR economists.
In that meeting, representatives from the New Jersey Treasury Department and the governor’s office met with NAR Deputy Chief Economist Jessica Lautz and Senior Economist Nadia Evangelou.
Lautz and Evangelou shared national and state-level home-buying trends that helped reshape the governor’s view of the proposed transfer fee and how best to implement their changes.
“This is NAR advocacy at its best—strategic, collaborative, and driven by data,” says NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn. “NJR’s work shows how our three-tiered structure can deliver real results for real people.”
The Changes
Ultimately, NJ REALTORS®’ advocacy led to several significant adjustments to the transfer fee proposal. Most notably, the projected home sale data for the coming year, which NJ REALTORS® believed was too low, was revised. It’s now projected to bring in additional revenue for fiscal year 2026, which runs July 1, 2025–June 30, 2026. According to a report for northjersey.com, the state expects to bring in more than $550 million over the year; among the beneficiaries of the money, the report says, is the New Jersey Affordable Housing Trust Fund.
While the initial proposal from the governor’s office would have impacted up to 20% of home sales, the final proposal will cover an estimated 2% of sales, due in large part to adjusting the increased fee up to the $2 million price point.
Another notable change in the final bill, which passed on June 30, was shifting the burden of the fee from the buyer to the seller. With current interest rates and overall concerns about affordability, NJ REALTORS® views this as a win.
“For many first-time homebuyers, removing this transfer fee will be the difference between being able to afford a certain home or not,” says NJR Director of Government Affairs Catherine Best. “NJ REALTORS® went into our efforts on this issue looking for solutions, and the positive reputation and REALTOR® brand went a long way in securing these solutions.”
