New Jersey’s exit tax is just one of the many financial implications of selling the marital home.
A recent Money Help column on NJ.com tackled the issue of the state’s so-called “exit tax.” New Jersey law requires pre-payment of either 8.97 percent of the profit on the sale of a home, or 2 percent of the total selling price, whichever is higher.
Experienced divorce lawyers in Monmouth County know the marital home is often a couple’s most valuable asset, as well as the marriage’s biggest liability. As the Money Help column notes, the “exit tax” only applies to those moving out of state. While the tax is termed a pre-payment and not an additional tax, it is still a money-grab by the state that must be planned for and avoided as part of maximizing your divorce settlement.
Residents remaining in state can fill out form GIT/REP-3 to waive the estimated tax payment in some cases, although the tax does not just apply to residential real estate. In 2006, the fee was expanded to add commercial properties, which is an important consideration for those divorcing with a small business, rental properties or significant real estate holdings.
New Jersey Divorce and the Marital Home
Our Monmouth County divorce attorneys have written extensively about issues involving divorce and the marital home.
- Couples are eligible for a deduction of up to $500,000 in profit on the sale of their home. The maximum deduction for singles is $250,000, for both state and federal income tax purposes.
- Read about the pros and cons of nesting in New Jersey, or sharing the marital home after divorce.
- Keeping the marital home may not be the best option, despite emotional attachment.
- Refinancing can be a challenge for one spouse. Leaving the home in both spouses’ names can be a very bad idea, regardless of what is in your divorce agreement.
Financial Security after New Jersey Divorce
The goal of an experienced family law firm in Monmouth County should always be to leave the client in the best emotional and financial shape possible after a divorce. In some cases, this could mean keeping the home, in many cases you will be far better off to start your new life somewhere new, without the weight of the financial and emotional baggage of the marital home.
Helping you avoid the primary pitfalls of divorce is one of our top responsibilities. This requires a thorough and knowledgeable review of your assets and liabilities; tax implications; child custody and support; spousal support and/or job training; and even your financial security in retirement.
The complexities are the leading reasons for proper divorce planning and seeking out experienced legal help. And it’s why consulting an experienced law firm is a wise investment, rather than just another divorce expense.
We understand financial concerns are among the chief sources of stress during many divorces. We are here to help and are committed to putting you on the path to your new life with the kind of financial footing that can bring you confidence and peace of mind.
New Jersey’s exit tax might be more myth than legend for those who choose to remain in the Garden State after divorce. But it illustrates the age-old adage that your most significant challenges during divorce may just be what you don’t know you don’t know.
Call Rozin|Golinder Law, LLC today for a free and confidential consultation.