Planning to sell your home in New Jersey and wondering whether or not you have to pay taxes? Had bad experiences with real estate agents and don't want to go through it again, ever?
We'll go over everything you need to know about taxes and debunk some common tax myths.
So, Do I Have To Pay Taxes When Selling a Home in New Jersey?
Generally, you'll owe taxes on any items you sell. That means you may receive less than your original purchase price. As a home seller, you're required to pay a transfer fee (typically less than 1% of the sale price). However, there are exceptions or cases where you pay less (senior citizens or primary residents)
What Taxes (and Exemptions) Am I Required To Pay/Eligible For?
The following events necessitate paying taxes for selling a New Jersey house:
- You are not a resident of the home you're selling. An estimated income tax of 2% of the consideration or 8.97% of the net sale proceeds must be paid before or at closing.
- The property provided you with some form of income (also referred to as "Capital Gains"). You will be taxed at a rate from 1.4% to 10.75% if you did not live in the house for at least two of the previous five years.
- The closing costs for your property exceed $1,000,000. This will cost sellers 1% of the total price.
What does all the above mean?
You may have to pay some or all of the taxes if:
- You are not the primary resident.
- You previously claimed the tax exemption.
- You did not live in the house for at least two of the previous five years.
- You generated income from the property.
Other Things To Keep in Mind Prior to a Sale Contract
Keep this list handy:
- Local real estate attorney or Title Company - People both the seller and potential buyers will want to work closely with to ensure a smooth transition to a purchase agreement.
- NJ seller disclosure form - While not required, a disclosure form is an option to share with prospective buyers.
- Home inspection to determine the extent of material defects - Both the buyer and seller will want this to avoid unpleasant surprises.
Real Estate Agent vs. Real Estate Wholesaler: The Best Way to a Home Sale
While there are certainly a variety of options to sell a home (listing it with a real estate agent or selling it directly to a real estate wholesaler), the answer depends on the level of ease with which you want to complete this transaction.
Do you want to sell your house without having to worry about paperwork? Sell My House New Jersey Home Buyers Inc. is the one to call!
Sell My House New Jersey Home Buyers Inc. has been involved in even complex real estate transactions for decades. That's why we understand the concerns many property owners have. Our goal is to make it so simple you won't feel it's a real estate transaction. We guarantee a smooth transaction without any hassle!
Our business address is 303a Park Ave, Suite #7G, East Orange, NJ 07017. Please note that we're not yet able to accept on-site visits, so we encourage you to instead give us a call at 973-604-3382!
Get in touch with one of our professional staff and sell your house quickly!