Will I be charged a fee if I sell a home for $1 million?
By Karin Price Mueller | NJMoneyHelp.com for NJ.com
Q. Forget taxes for a moment. If I sell a home for $1 million but I have a mortgage of $999,999, will I be charged a fee?
— Selling soon
A. There are several costs to consider when you sell a home.
It seems you’re talking about the Realty Transfer Fee.
It’s a fee that’s charged by the state when you record a change on a deed, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.
He said the fee is based on the value of the real estate, not on the gain realized by the seller.
“Normally this occurs when you sell your home and the new owner wants to put their name on the deed,” he said.
For the sale of a $500,000 home, the Realty Transfer Fee would be $2,150, he said. For a $1 million home, the fee would be $6,800.
This fee is usually paid by the seller of the property,” Kiely said.
“In February 2005, New Jersey began charging an additional 1% fee on top of the Realty Transfer Fee when the home sold is priced more than $1 million,” Kiely said. “This fee is usually paid by the buyer of the property.”
Both of these fees are due when the deed is changed, he said.
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Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.