• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

tax to leave state?

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

hereibenow

Junior Member
What is the name of your state? nj

hi, i am considering selling my house and moving out of state. i have heard something about some sort of 2% added tax to nj for 'leaving the state and purchasing elsewhere'. i have searched forums and researched online and cannot find out anything about this. rumor says a fee of 2% of selling price is added at closing. people who have had this happen to them said it seems there is nothing you can do if you buy another house in a different state you have to pay the fee/tax/whatever. is this really true? legally is this real? it sounds funny to me and besides which 2% of a $500000.00 house is $10,000. thats a hefty amount just to move out. anybody have any facts?
thanks for allWhat is the name of your state?
 


JETX

Senior Member
i have heard something about some sort of 2% added tax to nj for 'leaving the state and purchasing elsewhere'. rumor says a fee of 2% of selling price is added at closing.
So, what did your local real estate agent say when you asked them???
 

hereibenow

Junior Member
they said

to put on paperwork at closing ( referring to new address) that i'm moving in with a relative in the same state (nj) or that i'm going to rent locally. this to avoid the 'tax' and then go ahead and buy a house elsewhere and forward mail for a year. another realtor knew nothing about. people i know who had it happen at closing said their realtor also knew nothing about but it is supposedly part of the tax filing paperwork that goes to nj and they just had to 'pony up' the $ at closing. i don't know what is true, legal, scam, or confusion based on my attempt to gain info about this. you would think if this is true that all realtors would have this info, not to mention lawyers. a lawyer i posed this scenario to had no idea about this off top of his head.
interesting, no?
 

moburkes

Senior Member
Its interesting that 2% of something ends up being a hefty amount. 2% has never seemed like a lot. Especially when the house cost $500,000. But, I guess, it makes more sense to lie, and forward your mail for a year, than to be truthful. What a realtor.
 

hereibenow

Junior Member
it is shocking truly

to even have to be in a situation where the would be the only choice is lying and this is a surprise at closing. however, the point is...has anyone ever heard of this. is it in the tax code books somewhere? is this a scam or is it really what happens legally if you sell a place in nj and move to (let's say) georgia. why is there a disparity of knowledge regarding this? well: realtors in nj or lawyers in nj? any references appreciated.
 

JETX

Senior Member
Lets try this one more time.
1) Your question has nothing to do with the LAW.
2) Your question would be much better answered by you picking up the friggin' phone and calling a local real estate agent.
 

lcannister

Senior Member
From the link provide by another poster

P.L. 2004, C. 55, requires that on or after August 1, 2004, nonresident individuals, estates, or
trusts that sell or transfer real property in New Jersey make an estimated gross income tax
payment on the gain from a transfer/sale of real property as a condition of the recording of the
deed.
The Division takes the position that the Seller is considered a nonresident unless a new residence
(permanent place of abode, domicile) has been established in New Jersey.
Part-Year residents
will be considered nonresidents.
 
Appears to be an attempt by the legislature to obtain an estimated tax payment on profit from the sale of property levied against those who are non-residents. I'm sure it was put into place to encourage people who "forget" to include the gain on their state sales tax returns. Of course, it you pledge that you're still a resident of the state, any tax you owe will still be due, but you may be able to avoid the estimated withholding at closing.

Under certain conditions, foreign nationals must escrow a portion of the proceeds from real estate sales for similar reasons.
 

hereibenow

Junior Member
update

finally found a realtor who knew something about this. remax person said it is relatively new. within last 2 years under mcgreevey just before he left office. seems this 'tax' might be refunded by the state who seems to 'borrow it' for about 6 months and then fully 'reimburses' the funds at tax time. possibly this is being challenged and may go to court. most people know nothing about this. seems it is a tax accounting issue. i'm looking into talking to a financial advisor for more information. will keep all posted if interested.
thanks to all who had helpful and interesting information.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top