A residential property in Princeton, New Jersey sells for $1,200,000. The seller is a New Jersey resident. Using New Jersey's transfer tax structure, what is the total amount of transfer-related fees owed by the buyer at closing?
Correct Answer
A) $12,000, representing the 1% mansion tax on $1,200,000
The buyer's only transfer-related obligation in this transaction is the mansion tax. Under N.J.S.A. 46:15-7.2, the mansion tax is 1% of the total consideration for residential properties sold at $1,000,000 or more, and it is paid by the buyer. Calculation: $1,200,000 × 1% = $12,000. The standard RTF is the seller's obligation, not the buyer's, so the buyer owes only the $12,000 mansion tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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