NJ Realty Transfer Fee Exemptions: Who Qualifies and How to Claim

New Jersey’s Realty Transfer Fee exemptions fall into two groups: a list of transfers that owe nothing at all, and a reduced rate schedule for sellers who are seniors, blind, or disabled, and for qualifying affordable housing units. Both are set by statute, both require the seller to claim them on the Affidavit of Consideration filed with the deed, and both are audited by the Division of Taxation after recording.¹

Transfers That Owe No Fee

N.J.S.A. 46:15-10 lists the deeds that are fully exempt from the Realty Transfer Fee. The categories most closings run into are:²

Deeds where the total consideration is less than $100. This usually covers transfers that restructure how title is held without an actual sale.
Deeds between spouses, or between a parent and a child in either direction.
Deeds by or to the United States, the State of New Jersey, or any of their agencies or subdivisions.
Deeds that confirm or correct a previously recorded deed without transferring any new ownership interest.
Deeds that partition property among co-owners.
Deeds from an executor or administrator to an heir or beneficiary under a will or under the intestate laws of New Jersey.
Deeds between former spouses, recorded within 90 days after the entry of the divorce decree.

The 90-day window on divorce deeds is a strict deadline. Miss it and the exemption is gone; the full fee applies to the transfer as if it were an ordinary sale.² If a property split is part of a divorce, coordinate the recording date with the attorneys handling the decree.

A note on family transfers: the exemption covers spouses and the parent-child line, not siblings, and not aunts, uncles, cousins, or in-laws. Transfers among those relatives are treated as ordinary sales for fee purposes, with consideration determined by what was actually paid or assumed.

Reduced Rates for Seniors, Blind and Disabled Sellers, and Affordable Housing

Under N.J.S.A. 46:15-10.1, three categories of individual sellers qualify to pay the Realty Transfer Fee on a substantially reduced rate schedule instead of the standard one:³

Senior citizens age 62 or older.
Blind persons, as defined by state standards.
Persons receiving permanent disability benefits.

Two conditions attach to every one of these categories. The property has to be the seller’s primary residence, and it has to be a one- or two-family dwelling. Investment properties, vacation homes, and larger multi-unit buildings do not qualify, even if the owner is otherwise eligible.³

When co-owners sell together, only the eligible seller’s share of the fee is reduced. If a 65-year-old sells jointly with a 55-year-old spouse, the older spouse’s share qualifies for the senior rate and the younger spouse’s does not, unless that seller independently qualifies as blind or disabled.

Properties classified as low- and moderate-income housing units under an approved affordable housing program also qualify for the reduced schedule, regardless of who the seller is.¹

The savings are meaningful. On the reduced schedule, the fee starts at $0.50 per $500 of consideration up to $150,000, compared with $2.00 per $500 on the standard schedule at the same tier, and the gap widens at higher price points. At the top end, over $1,000,000 in consideration, the reduced rate tops out at $3.40 per $500 versus the standard $6.05 per $500.¹

Claiming the Exemption at Closing

An exemption is not automatic. The seller has to claim it on the Affidavit of Consideration (Form RTF-1), which is filed in duplicate along with the deed at the county clerk’s or register’s office. The form asks for the full names of grantors and grantees, the property’s block and lot, the total consideration including any assumed mortgages or liens, and the specific statutory citation supporting the claimed exemption or reduced rate.⁴

Everything on the affidavit has to match the deed. Mismatches are a common reason clerks reject recordings, and a rejected recording can delay a closing or, on a divorce deed, blow the 90-day window entirely. The RTF-1 has to be signed and notarized before it is submitted.⁴ Once accepted, the clerk forwards a copy to the Division of Taxation’s Realty Transfer Fee Unit in Trenton for audit review.

If You Already Paid, How to Get It Back

Sellers who paid the full fee at closing but were entitled to an exemption or reduced rate can file Form RTF-3 (Claim for Refund) with the Division of Taxation. The claim has to be filed within four years of the original payment. The process also requires re-recording the deed at the county clerk’s office to reflect the exemption, and submitting the RTF-3 with a corrected RTF-1 and proof of the re-recording.⁵

The Penalty for a False Exemption Claim

Knowingly falsifying the consideration or falsely claiming an exemption on the deed, the acknowledgment, or the affidavit is a fourth degree crime under N.J.S.A. 46:15-9.⁶ A fourth degree crime in New Jersey carries a fine of up to $10,000.⁷ Because the Division of Taxation receives every RTF-1 and audits claims against public records, exemption claims that don’t hold up tend to surface.

What These Exemptions Don’t Cover

Two separate charges at a New Jersey closing sit outside the RTF exemption rules, and being exempt from the Realty Transfer Fee does not touch either one.

The first is the Graduated Percent Fee on sales over $1,000,000, which is a supplemental fee with its own exemption regime under N.J.S.A. 46:15-7.2 (chiefly, sales to 501(c)(3) buyers and certain merger-related transfers), claimed on a separate affidavit, Form RTF-1EE. Refund claims for the Graduated Percent Fee have to be filed within 90 days of payment, not the four years that applies to the base RTF.⁸⁵

The second is the estimated Gross Income Tax payment required from non-resident sellers, calculated at 10.75% of the gain with a floor of 2% of total consideration. A non-resident who qualifies for an RTF exemption still owes this payment at closing unless they can file Form GIT/REP-3 to certify residency or another statutory basis for exemption.⁹

1
New Jersey Division of Taxation. Realty Transfer Fee
2
Justia. New Jersey Code 46:15-10 – Exemptions From Realty Transfer Fee
3
Justia. New Jersey Code 46:15-10.1
4
New Jersey Department of the Treasury. Affidavit of Consideration for Use by Seller – RTF-1
5
New Jersey Division of Taxation. Claim for Refund – Realty Transfer Fee – RTF-3
6
Justia. New Jersey Code 46:15-9 – Falsifying Consideration, Failure to Disclose New Construction on Deed and Affidavits; Penalty
7
Justia. New Jersey Code 2C:43-3 – Fines and Restitutions
8
New Jersey Department of the Treasury. Affidavit of Consideration for Graduated Percent Fee – RTF-1EE
9
New Jersey Division of Taxation. FAQs on Gross Income Tax (GIT) Forms Required for Sale or Transfer of Real Property in New Jersey