New Jersey exit tax, explained
It is not a new tax. It is an estimated payment some sellers make at closing. Most New Jersey homeowners selling their own home do not pay it.
Estimates only. Not tax or legal advice. Sources: NJ Division of Taxation, nonresident sellers, GIT/REP-1 and GIT/REP-3, checked November 11, 2026.
Who pays and who does not
| Seller at closing | Form | Paid at closing |
|---|---|---|
| New Jersey resident | GIT/REP-3, box 1 | Nothing |
| Selling a principal residence that qualifies for the federal exclusion, resident or not | GIT/REP-3, box 2 | Nothing |
| Nonresident, other cases | GIT/REP-1 | The larger of 10.75% of the gain or 2% of the price |
Two examples
- A nonresident sells a second home for $800,000 that cost $500,000. The gain is $300,000. 10.75% of it is $32,250, which is more than 2% of the price ($16,000), so $32,250 is paid at closing.
- The same sale with a $790,000 cost. The gain is $10,000, and 10.75% of it is $1,075. The 2% minimum applies, so $16,000 is paid at closing and the difference comes back on the nonresident return.
Buyer's agent pay is separate and your choice.
In New Jersey commissions are negotiable.
Questions
Is the New Jersey exit tax a separate tax?
No. It is an estimated payment toward New Jersey income tax on the gain, collected at closing from sellers who are not New Jersey residents. You file a New Jersey nonresident return and any overpayment comes back to you.
How much is it?
The larger of 10.75% of the estimated gain or 2% of the sale price, on Form GIT/REP-1.
Do New Jersey residents pay it?
No. A seller who is a New Jersey resident at closing files Form GIT/REP-3 (box 1) and nothing is withheld.
I am moving out of state. Do I pay it?
If the home was your principal residence and the gain qualifies for the federal home-sale exclusion (IRC 121), you file GIT/REP-3 (box 2) and nothing is withheld, even if you are no longer a resident. Otherwise, residency at closing decides. Ask your attorney or tax advisor about timing.
When is it paid?
At closing, out of the proceeds, unless the payment was made earlier with Form GIT/REP-2.
