Bulletin: NJ000089

Date:
July 13, 2004
To:
All New Jersey Agents and Issuing Offices
RE:
New Jersey 'Mansion Tax' Payable by the BUYER as of August 1st

Dear Associates:

Effective August 1, 2004, the buyer of a residential property for consideration in excess of one million ($1,000,000) dollars must pay a fee of one (1%) percent of the total purchase price upon the recording of the deed. This new law is included in P.L. 2004, c.66 (A3115/S1713), signed by the Governor on June 30.

Called the "mansion tax" by the press, the new one (1%) percent fee applies to transfers of land 'zoned for residential use' whether or not the land is improved. If the purchase price is more than $1,000,000, the fee is payable to the county clerk at the time the deed is recorded.

It is anticipated that the new law shall be effective for all recordable deeds received by the county recording office on or after Monday, August 2. Should the State announce a different implementation time frame, or require the completion of any additional forms, we shall advise.

UNDERWRITING GUIDELINES

In all transactions where the consideration is in excess of one million ($1,000,000) dollars:

1) Verify whether the premises are zoned for residential use.

2) If zoned for residential use, the 1% fee must be collected and paid to the County Recording officer at the time of the recording of the deed.

If the fee is not collected and paid at the time the deed is presented for recordation, the deed will not be recorded by the county clerk.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None