LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 4196
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JUNE 23, 2026
SUMMARY
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Synopsis: |
Modifies additional fees and taxes imposed on certain real property transfers valued over $1 million; expands imposition of fees and taxes to real property classified Industrial Property and certain Apartments. |
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Type of Impact: |
Annual net revenue loss to the General Fund |
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Agency Affected: |
Department of the Treasury |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Year 1 |
Year 2 |
Year 3 |
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State Net Revenue Decrease |
$164.4 million |
$171.2 million |
$178.3 million |
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· The Office of Legislative Services (OLS) estimates that the bill will decrease State revenue collections from the Graduated Percent Fee by a net $164.4 million in FY2027, a net $171.2 million in FY2028, and a net $178.3 million in FY2029. The estimate has two components.
· For FY2027, the OLS projects a loss of $263.8 million in Graduated Percent Fee collections from the reduced fee rate schedule under the bill.
· For FY2027, the OLS projects a gain of $99.4 million in Graduated Percent Fee collections from newly imposing the fee on sales of industrial property and apartment property of at least five units in which fewer than 10 percent of the residential units are affordable housing units.
BILL DESCRIPTION
The bill lowers the rates of the Graduated Percent Fee that are imposed on certain real property transactions of more than $1.0 million, as shown in the table on the next page. Under current law, the fee applies to sales of property classified as residential, including apartment property with fewer than five units; commercial (other than industrial or apartments); cooperative units; and farm property other than land actively devoted to agricultural use if it contains a structure intended or suited for residential use.
The bill also newly imposes the fee on sales of industrial property and apartment property of at least five units in which fewer than 10 percent of the residential units are affordable housing units.
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Comparison of Current Graduated Percent Fee Rate Schedule to Rate Schedule under Bill |
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Value of Real Property Transfer |
Current Fee* |
Fee Under Bill* |
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In excess of $1.0 Million but not in excess of $2.0 Million |
1.0 percent |
0.0 percent |
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In excess of $2.0 Million but not in excess of $2.5 Million |
2.0 percent |
1.0 percent |
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In excess of $2.5 Million but not in excess of $3.0 Million |
2.5 percent |
1.5 percent |
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In excess of $3.0 Million but not in excess of $3.5 Million |
3.0 percent |
2.0 percent |
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In excess of $3.5 Million |
3.5 percent |
2.5 percent |
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*The fee rate applies to the entire sales amount of the transaction |
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FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that the bill will decrease State revenue collections by a net $164.4 million in FY2027, a net $171.2 million in FY2028, and a net $178.3 million in FY2029.
For FY2027, the OLS projects a revenue loss of $263.8 million from the bill’s reduced Graduated Percent Fee rate schedule. The revenue loss will be partially abated by the expansion of the categories of property sales to which the fee applies. Notably, the OLS estimates that the fee base expansion will raise State revenue by $99.4 million in FY2027, of which $88.3 million will accrue from sales of industrial properties and $11.2 million from sales of apartment property of at least five units in which fewer than 10 percent of the residential units are affordable housing units.
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Section: |
Legislative Budget and Finance Office |
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Analyst: |
Revenue and Economic Policy Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).