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2025 New Jersey Tax Changes

By Patrick Courtney

New Jersey is making big changes to its taxes in 2025, and they could affect just about everyone. The state’s new $58.8 billion budget includes higher fees on high-end real estate sales, tobacco, and sports betting. The budget increase is the largest in New Jersey history. At the same time, there’s some good news for homeowners and seniors, with expanded tax relief programs on the way.

Tax Hikes

Real-Estate Transfer Fees:

Also known as “Mansion Fees,” there has been an increase in tax when it comes to property transfer. There is a 2% property transfer tax on home sales between $2 million and $2.5 million, an additional 0.5% for every $500,000 in home value over $2.5 million, and a 3.5% cap for homes worth $3.5 million or more.

Tobacco and Vape Products:

The state of New Jersey has increased taxes on tobacco and vape products. For a pack of cigarettes, the tax has increased $0.30 from $2.70 to $3. They have increased the tax for vapes from 10 cents per ml to 30 cents per ml. 

Gambling and Sports Betting:

Originally, tax rates on online gambling were 15%, and tax rates on sports wagers were 13%. With the new budget, the tax rates for both gambling and sports wagers will jump up to 19.75%.

Tax Relief

The new budget has an emphasis on rewarding New Jersey homeowners, specifically to senior homeowners. The state property-tax relief programs will continue, as well as a new program called Stay NJ.

ANCHOR: The Affordable New Jersey Communities for Homeowners and Renters is a property tax relief program allowing NJ homeowners to receive property tax relief. Homeowners with income of $150,000 or less will receive $1,500, and income between $150,000 and $250,000 will receive $1,000. This program also applies to renters who will receive $450 if their income does not exceed $150,000. Eligible seniors aged 65 or older will receive an additional $250 on top of the above amounts 

Senior Freeze: The Senior Freeze Program reimburses eligible senior citizens and disabled persons for their property taxes (or mobile home park site fee) increases on their principal residence (main home). 

Stay NJ: The Stay NJ Program offers substantial property tax relief for qualifying senior homeowners. Eligible individuals will receive a tax credit equal to 50% of their property taxes, up to a maximum of $13,000, with a 2024 benefit cap of $6,500. To qualify, individuals must have owned and lived in their home for all 12 months of 2024 and have an income <$500,000. 

Eligibility for all three of these property tax relief programs can be found in a single application. Your eligibility is based on residency, income, and age as of 2023 and 2024. You can apply for these property tax benefits through the combined application on https://propertytaxreliefapp.nj.gov/. The deadline to file is October 31, 2025.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions regarding the 2025 NJ tax changes, please do not hesitate to contact us at Lear & Pannepacker.