New Jersey Bill of Sale - DOC
New Jersey Bill of Sale document sample
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Realty Transfer Fee – S 3115 By Miles S. Winder, III Reprinted with Authors Permission For a second year in a row the New Jersey Legislature (not to be confused with the New Jersey Devils) has raised the Realty Transfer Fee. The new law (Senate Bill No.3115) is effective August 1, 2004. A new component has been added to the RTF, a “general purpose fee,” which applies to transactions which exceeds $350,000 in recited consideration and is charged on the entire. This “general purpose fee,” when applicable, is added to the other components of the RTF (i.e. the basic fee plus the additional fee plus the supplementa1 fee). The words “NEW CONSTRUCTION” (in upper case lettering) shall be printed at the top of the first page of the deed, and an affidavit by the grantor stating that the transfer is of property upon which there is new construction shall be appended to the deed.” A grantor who does not sign and attach the affidavit disclosing the new construction on the land is “guilty of a disorderly persons offense.” The second part of the RTF Law is even more startling. It imposes a brand new tax on Buyers of Real estate where the price is greater than $1 million. The law states as follows, “there is imposed upon the grantee of a deed for the transfer of real property zoned for residential use, whether improved or not, for consideration in excess of $1,000,000 recited in the deed, a fee in an amount equal to 1 percent of the entire amount of such consideration, which fee shall be collected by the county recording officer at the time the deed is offered for recording and remitted to the “ State Treasurer not later than the 10th day of the month following the month of collection for deposit into the General Fund.” Please note that there does not have to be a structure on the property. It is the $1,000,000 threshold together with the zoning and not the actual use that triggers the fee's application. Finally for Real Estate Lawyers there is yet more “good news.” Lawyers must now act as collection agents for the Division of Taxation where there is an out of state seller. The new law establishes a new requirement for nonresidents to pay estimated New Jersey gross income tax on gain on New Jersey real estate transactions. For sales or transfers of real property occurring on or after August 1, 2004, the bill requires nonresident individuals, estates and trusts who sell or transfer certain real property located within New Jersey to pay estimated gross income tax to the Division of Taxation, which estimated tax payment is calculated according to a formula in the statute (based on federal income tax purposes), but may not be less than 2% of the consideration for the sale of transfer stated in the deed affecting the conveyance. The estimated tax form must be filed by the nonresident taxpayer whether there is a gain or a loss on the sale of the property. A nonresident transferor is exempt from the payment of estimated gross income tax on the transfer of real property under the bill if: 1. the real property being sold or transferred is used exclusively as the principal residence of the seller or transferor (if property other than the principal residence is being sold, then that other property is subject to this estimated tax payment procedure); or 2. the seller or transferor is a mortgagor conveying the mortgaged property to a mortgagee in lieu of foreclosure with no additional consideration; or 3. the seller, transferor or transferee is an agency or authority of the USA, an agency or authority of the State of New Jersey, or is a member of a protected lender's class (e.g. the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or a private mortgage insurance company). No deed covering applicable sales will be recorded unless accompanied by an estimated tax form and the payment of any estimated tax or unless the form includes a certification by the seller or transferor on the deed that the estimated tax requirement does not apply to the sale or transfer. The Division of taxation has not yet released any new forms or regulations to implement this new law. Just to make certain that no group goes through the year unscathed the legislature decided that municipal court lawyers should be abused as well when it passed the surcharge bill for unsafe driving offenses. Now violations of N.J.S.A. 39:4-97.2 will now include a $250 surcharge. The surcharge will be imposed on a one-time basis in municipal court and will be collected by the court. The surcharge will be imposed and collected in addition to any fine imposed. First and second offenses remain n no-point violations. As a result, a first offender charged with 39:4-97.2 may face a total cost in municipal court of $436. ($150 fine + $6 assessments + $30 costs + $250 surcharge). Also, remember, the fine amount can be doubled in construction zones and safe corridors areas. A copy of the new laws may be obtained from the New Jersey state legislative Internet web site at the following address: http://www.njleg.state.nj. Happy trials!