Englewood Cliffs Mansion Tax: What It Means for Sellers

Run the math on a hypothetical Englewood Cliffs listing at the borough's own median list price, $3.79 million as of May 2026, and a cost appears that would not have touched the seller a year earlier. At that price, the Graduated Percent Fee, the tax everyone still calls the mansion tax, comes to $132,650. Not because the home is unusually large or the buyer unusually wealthy. Because $3.79 million happens to sit in the top bracket of a fee schedule that used to be flat, used to be 1 percent, and used to be the buyer's problem entirely.

That last part is the piece most sellers in this borough have not fully absorbed. The tax changed twice in one law: the rate went from flat to tiered, and the party who pays it flipped from buyer to seller. For most New Jersey towns, where a $1 million sale is the exception, that second change is a footnote. In Englewood Cliffs, where the median list price is nearly four times the old threshold, it is close to the whole story.

The Fee Moved From The Buyer's Column To Yours

The mansion tax has existed since 2004, a 1 percent fee on residential sales over $1 million, historically paid by the buyer at closing. Governor Phil Murphy signed a change into law on June 30, 2025 as part of the state's fiscal year 2026 budget. For any deed recorded on or after July 10, 2025, the fee is paid by the seller, and it is no longer a flat 1 percent. It now scales with the sale price:

There was a brief transition window. Sellers under contract before July 10, 2025 could still close under the old 1 percent rate and apply for a refund of anything paid above it, provided the deed recorded by November 15, 2025. That date has come and gone. Every Englewood Cliffs closing since has fallen under the full tiered schedule, no exceptions, no phase-in left to wait out.

Every Sale Here Is Already Above The Old Threshold

The original mansion tax targeted true outliers, a $1 million sale in a state where the typical home cost far less. That framing does not describe Englewood Cliffs. With a median list price of $3.79 million in May 2026, and homes on the market a median of 59 days that same month, this borough was never operating near the $1 million line. It has been operating well past $2 million, $3 million, and into the top bracket as a matter of course.

That reframes what the tax actually is here. In most of New Jersey, it is a luxury surcharge, something that applies to the seller of an unusually expensive home. In Englewood Cliffs, at the borough's own median, it functions closer to a default line item, the kind of cost a seller should assume applies rather than check whether it applies. A seller pricing a home at or above the median is not asking whether they land in a bracket. They are asking which one, and the answer for a typical Cliffs listing is likely to be the top or second-to-top tier.

The Dollar That Costs You A Full Percentage Point

The bracket structure has a mechanical quirk that catches people off guard even when they know the tax exists. The rate applies to the entire sale price once a threshold is crossed, not just the amount above it. A home that sells for $2,000,000 owes 1 percent, $20,000. A home that sells for $2,100,000, one hundred thousand dollars more, owes 2 percent on the whole amount, $42,000. That is more than double the tax for a 5 percent increase in price.

The same cliff repeats at $2.5 million, $3 million, and $3.5 million. For a seller negotiating final price with a buyer, or an agent setting a listing number, these are not abstract brackets. They are points where a small concession in negotiation, or a small overreach in the initial ask, changes the tax bill by tens of thousands of dollars rather than a few hundred. Pricing a home at $3,490,000 instead of $3,510,000 is the difference between a 3 percent fee and a 3.5 percent fee on the full amount, roughly $17,500 on a home near that line. That is worth building into the pricing conversation before the listing goes live, not after an offer arrives.

One Classification Wrinkle Worth A Phone Call

Price is not the only variable. How a property is classified can decide whether the fee applies at all, and that question got sharper on April 27, 2026, when the New Jersey Tax Court ruled in favor of a taxpayer on a mixed-use classification dispute, establishing that a property's predominant use, not just its zoning label, should determine how it is taxed. David Wolfe, co-managing partner at the New Jersey law firm Skoloff & Wolfe, said the ruling's "adoption of a predominant use analysis underscores the importance of carefully evaluating how a property is classified for Mansion Tax purposes."

That decision was about a mixed-use commercial property, not a single-family estate, so its direct reach into most Englewood Cliffs sales is limited. But the borough does have a category of property where the question could matter: an estate with a converted carriage house rented separately, a detached office suite with its own entrance, or any parcel where residential and non-residential use sit side by side on the same deed. For those sellers, the classification question is worth raising with a real estate attorney before listing, not after a title search flags it.

What This Changes Before You Sign A Listing Agreement

None of this changes whether a home should be sold. It changes what a seller should know before agreeing to a number. A few things worth confirming early:

• Ask your attorney to model the tax at your target list price and at the price ten percent below it, so the bracket effect is visible before you negotiate, not after.
• Confirm which side of a bracket line your likely sale price sits on, since a price adjusted by even a few thousand dollars can move the entire fee.
• If any portion of the property has ever been used for something other than residential purposes, raise the classification question directly rather than assuming Class 2 residential applies by default.
• Build the fee into your net proceeds estimate from the start of the pricing conversation, since it now comes off the seller's side of the ledger and can no longer be treated as the buyer's cost to absorb.

A New Jersey deed over $1 million also requires an Affidavit of Consideration on Form RTF-1EE to be annexed at recording, one more document a closing attorney should already be tracking, but worth confirming is on the list.

The Number That Should Be In Your Pricing Conversation From Day One

The headline change in this law is procedural, who pays and when. The number that actually matters to an Englewood Cliffs seller is the one this piece opened with: a median-priced home in this borough now carries a tax bill north of $130,000 that a seller closing the same sale in 2024 would never have paid. That is not a rounding error in a closing statement. It is a line item that belongs in the first pricing conversation with your agent, not a surprise on the settlement sheet.

Sara Shin Select works with sellers across Englewood Cliffs and the surrounding Bergen County corridor who are pricing homes with exactly this kind of math in mind, weighing net proceeds against bracket lines before a sign goes in the yard. If you are thinking about listing and want a clear-eyed read on what a specific price point means for your bottom line, Sara Shin Select is a good place to start that conversation. Let's connect.