As the founder and broker of Tverdov Housing, with over a decade specializing in New Brunswick's real estate—particularly multi-family and investment properties near Rutgers University—I've guided sellers through New Jersey's unique tax requirements on hundreds of closings. The so-called "exit tax" often raises questions, but it's actually an estimated Gross Income Tax payment on potential capital gains from the sale, handled at closing—not separate quarterly estimated payments.
As of January 2026, whether you need this payment depends primarily on your residency status:
-
If you are a New Jersey resident (including New Brunswick locals): No estimated payment is required at closing. You simply complete Form GIT/REP-3 (Seller's Residency Certification/Exemption) and submit it with the deed. Any capital gains tax due is reported and paid when filing your annual NJ-1040 resident return the following year.
-
If you are a nonresident (living outside NJ at closing): Yes, you generally must make an estimated Gross Income Tax payment at closing, calculated as the higher of:
-
Your gain multiplied by the highest NJ Gross Income Tax rate (currently up to 10.75%).
-
2% of the total sale consideration. This is submitted via Form GIT/REP-1 (or prepay for GIT/REP-2). Even with no gain, the minimum 2% often applies unless exempted.
Exemptions (via GIT/REP-3) apply to both residents and nonresidents, such as:
-
Principal residence qualifying for federal IRC Section 121 exclusion ($250,000 single/$500,000 married).
-
Sale price $1,000 or less.
-
1031 exchange (partial for boot received).
-
Certain military deployments.
This requirement is statewide, including New Brunswick—no local additions beyond the standard Realty Transfer Fee and CCO inspection. At Tverdov Housing, we coordinate with attorneys to prepare the correct GIT/REP form, avoiding delays in recording the deed.
Capital gains follow federal rules for NJ purposes, but consult a tax professional for your situation, especially if self-employed or with complex basis adjustments.
For more on Central Jersey transactions, check The New Jersey Real Estate Investor podcast.
Selling in New Brunswick? Contact Tverdov Housing—we'll ensure your closing handles taxes smoothly and maximizes net proceeds.
