A New Local Real Estate Transfer Tax ??

Among a home's closing costs in New Jersey is a state tax called the Realty Transfer Fee. The tax amount owed is based on the price you are receiving for your home or real estate. 

Since 2003, the New Jersey Legislature and Governors have increased this tax by 80% in order to fund government spending.  Many state government officials & legislators now want to increase this tax again. They want to add a local Home / Real Estate Sale Tax provision so that local towns can impose their own tax on home sales. 

For homeowners, it means an instant cut in the equity in their home when they sell.  For example, a New Jersey home owner selling a typical home for $600,000 would have to pay $5,185 of the sales proceeds to the state.  If a local tax goes into effect, they'd have to pay an additional $880 from the sale to their local town - an increase of 17%. 

This tax also hurts home buyers as well.  Home sellers may wish to increase the price of their home to offset home sales tax their local town demands that they pay. Then of course all home buyers eventually sell their home at some point and will have to pay the tax on top of all the property taxes they have already paid though the years.

 

Do we really need more real estate taxes here in New Jersey? Essex County NJ already has some of the highest property taxes in the state. Morris County NJ has a lot lower real estate taxes and so does Union County NJ, but do homeowners in any of these places or the rest of New Jersey need to pay additional real estate taxes?  Can our local and state governments here in New Jersey learn to do more with less, just like the rest of us have?