Payment responsibility shift

The most immediate and impactful change concerns who pays the mansion tax.

Under the new rules, the responsibility has moved from the buyer to the seller—marking a notable reversal from decades of precedent.

Previous law: Buyers were responsible for paying a 1% "mansion tax" on qualifying real estate transfers over $1 million.

New law: Sellers are now responsible for paying the tax, along with the standard Realty Transfer Fee (RTF).

Graduated Tax Rates

Beyond shifting responsibility, the law also changes how much is owed. Instead of a flat 1% across the board, the new system introduces a tiered rate structure that scales upward with the property’s sale price.

• $1,000,000 to $2,000,000: 1%
• $2,000,000 to $2,500,000: 2%
• $2,500,000 to $3,000,000: 2.5%
• $3,000,000 to $3,500,000: 3%
• Over $3,500,000: 3.5%

Affected properties

Despite its nickname, the “mansion tax” now extends well beyond luxury homes. The updated law broadens its reach to include certain commercial, farm, and entity-based transactions, affecting a wider range of property owners.

• Residential properties: This includes Class 2 homes, condos, and co-op units.
• Commercial properties: Some commercial properties, known as Class 4A, are also subject to the tax.
• Farm properties: Class 3A farm properties containing residential structures are included.
• Controlling interest transfers: The law also affects the sale of controlling interests in entities that own these types of properties.

Refund for transitional contracts

Recognizing that some deals were already underway when the law took effect, the state built in a limited refund provision. Sellers who had contracts signed before July 10, 2025, may be eligible for relief under specific conditions.

• Eligibility: Sellers who had a signed contract before July 10, 2025, and record the deed by November 15, 2025, can apply for a refund.
• Process: The seller must pay the new tiered rate at closing but can then apply to the Division of Taxation for a refund of any amount paid above the old 1% rate.

At Purveyor of Good Deeds, I believe that understanding the fine print is part of protecting what you’ve built. The July 2025 mansion tax changes aren’t just procedural—they directly affect your profit margins, negotiation strategy, and timing at closing.

Before you list or finalize a high-value sale, take a moment to review your numbers, talk with your attorney or title professional, and make sure your deal structure reflects the new rules.

If you’re unsure how these updates might impact your upcoming transaction, reach out to me directly. I’ll help you navigate the changes so you can move forward with clarity and confidence—because good deeds start with informed decisions.