Carlos, who lives in Florida, owns a rental property in Hoboken, New Jersey. He sells the property for $800,000 to a local buyer. At closing, which statement BEST describes how the Realty Transfer Fee is applied to this transaction?
Correct Answer
B) Carlos pays the standard RTF plus an additional non-resident seller fee, and the buyer pays no transfer fees
Under New Jersey law, non-resident sellers are subject to the standard Realty Transfer Fee plus an additional non-resident seller withholding fee (also referred to as the GIT/REP withholding). This additional fee is designed to ensure that non-resident sellers pay New Jersey income tax on any gain from the sale. Carlos, as a Florida resident selling NJ property, owes the standard RTF plus the non-resident withholding. The buyer (a NJ resident) owes no transfer fees since the sale price is below $1,000,000 and the mansion tax does not apply.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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