David is selling his residential property in Montclair, New Jersey for $450,000. Under New Jersey's Realty Transfer Fee Act, the RTF rate for this transaction is $3.90 per $500 of consideration (or fraction thereof) for the portion of consideration up to $550,000. How much does David owe in Realty Transfer Fee at closing?
Correct Answer
A) $3,510.00
Step 1 — Determine the number of $500 units: $450,000 ÷ $500 = 900 units (exactly divisible, no fraction). Step 2 — Apply the RTF rate: 900 units × $3.90 = $3,510.00. David owes $3,510.00 in Realty Transfer Fee. The RTF is the seller's obligation under N.J.S.A. 46:15-5, calculated on a per-$500 basis on the consideration (sales price).
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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