Bucco Happy to Hear Discussion on Eliminating Estate and Realty Transfer Taxes
Hopes Legislature will take action on A-397 and A-389
WASHINGTON, D.C. – April 18, 2014 – (RealEstateRama) — Assembly Deputy Republican Leader Anthony M. Bucco said he is pleased to hear of the support for repealing the estate and realty transfer taxes which lead New Jersey residents to leave the state for a more tax-friendly climate. Bucco sponsors two bills in the Assembly (A-397 and A-389) that address both issues which he has sponsored in the previous legislative session as well.
“Inheritance taxes and real estate transfers fees are two onerous taxes that contribute to the tax-migration out of New Jersey,” said Bucco, R-Morris and Somerset. “The bills I have sponsored over the last two legislative sessions speak to both of these issues and could be heard in committee at any time. Creating jobs and economic development are very important as is allowing people to hold on to more of their hard earned money. Instead of people fleeing our state, especially as they get older, they will have a reason to stay in New Jersey and contribute to our economy.”
Bucco sponsors A-397, which repeals the New Jersey estate tax and would apply to the estate of any resident decedent dying on or after January 1, 2010. Currently, New Jersey imposes an estate tax based on a credit historically allowed by federal law against the federal estate tax for the payment of inheritance taxes or other legacy taxes imposed by the states. New Jersey and Maryland are the only two states that levy an estate tax and a state inheritance tax.
“Under the state’s current tax structure, it can be just as expensive when you die as when you are alive,” stated Bucco, who is a member of the Assembly Budget Committee. “Residents are looking to eliminate or reduce their tax liability for themselves and their survivors. Many states offer attractive tax structures to entice people to relocate. New Jersey has the opportunity to do away with taxes that takes people’s money when they move or die and is a factor they consider when deciding if they want to continue living here.”
Assembly bill, A-389, eliminates three enacted realty transfer fees: the supplemental fee created in 2003, the general purpose fee, and the “mansion” fee created 2004.
The supplemental fee applies to sellers and consists of a graduated fee, applicable to non-exempt property sales. The general purpose fee applies to a seller and consists of a graduated fee, applicable to non-exempt real property exceeding $350,000. The “mansion” fee consists of 1 percent of the purchase price and applies to buyers of residential property exceeding $1,000,000.
The three fees substantially increase the cost of buying and selling real property for New Jerseyans. As an example, the total transfer fee costs of selling a $750,000 home is now $6,775. This amount is almost double the $3,525 cost from fiscal year 2003.
