Trenton, NJ – A million dollars used to be able to buy a mansion in New Jersey. Today, it could just get a family going in some parts of the Garden State. Now, Governor Murphy wants to tax that.
Governor Phil Murphy is eyeing a significant tax increase on high-value home sales in New Jersey, branding properties over $1 million as “mansions” worthy of a heftier levy. As part of his $58.1 billion budget proposal for the fiscal year starting July 1, Murphy aims to boost the state’s “mansion tax” from its current 1% to 2% on sales exceeding $1 million, and to 3% for those topping $2 million. The move, projected to rake in $317 million, comes as housing prices across the state continue their meteoric rise, pushing even modest homes into million-dollar territory.
Under the existing policy, buyers of properties sold for over $1 million pay a 1% “additional fee” on top of the standard realty transfer fee—currently $6.05 per $500, typically shouldered by the seller. Murphy’s plan would double that buyer’s fee for sales between $1 million and $2 million and triple it for anything pricier, framing it as a way to tap into the wealth of New Jersey’s booming real estate market. Critics, however, argue it’s a misnomer to call a $1 million home a “mansion” in today’s economy, especially in a state where starter homes in some towns now breach that threshold.
“Back in 2004, when this tax started, $1 million bought you a legit estate,” said David Arabia, a broker at Corcoran Infinity Properties. “Now? It’s an entry-level fixer-upper in half the suburbs. Murphy’s acting like everyone buying at that price is a millionaire lounging in a gated compound.”
The proposal lands amid a red-hot housing market. Zillow reports 86 New Jersey towns with median listing prices above $1 million as of March 2025, including 25 surpassing $2 million—a sharp jump from just two in 2019. Inflation and demand have eroded the “mansion” label’s exclusivity, yet Murphy’s budget hinges on this revenue to offset a $1.2 billion structural deficit, fund property tax relief like Stay NJ, and weather potential federal Medicaid cuts.
But with legislative approval pending by June 30, opposition is brewing. Assemblyman Brian Bergen (R-Morris) called it “another tax grab disguised as equity,” predicting pushback from both buyers and sellers. “A $1 million house isn’t a mansion—it’s a reality for two-income families in Bergen County. Murphy’s out of touch.”