Official Site of The State of New Jersey

Change to Controlling Interest Transfer Tax (CITT)

P.L. 2025, c. 69 enacted June 30, 2025, effective July 10, 2025, amends the 1% tax required on certain transfers of interests in an entity owning Class 4A commercial property for consideration over $1 million (or for situations where additional assets and property are included in addition to the Class 4A commercial property, where the equalized assessed value of the Class 4A commercial property is over $1 million) to a tax with gradated percentage rates based on the amount of consideration or equalized assessed value of the Class 4A commercial property. Further, the tax is now legally imposed on the seller instead of the purchaser. The Controlling Interest Transfer Tax is now calculated at a varying percentage rate for when the interest was transferred pursuant to a contract or other binding agreement that was fully executed on or after July 10, 2025.

The new rates are as follows:

1. 1% of total consideration or equalized assessed value, as the case may be, if in excess of $1,000,000 but not in excess of $2,000,000;
2. 2% of total consideration or equalized assessed value, as the case may be, if in excess of $2,000,000 but not in excess of $2,500,000;
3. 2.5% of total consideration or equalized assessed value, as the case may be, if in excess of $2,500,000 but not in excess of $3,000,000;
4. 3% of total consideration or equalized assessed value, as the case may be, if in excess of $3,000,000 but not in excess of $3,500,000;
5. 3.5% of total consideration or equalized assessed value, as the case may be, if in excess of $3,500,000.

EXAMPLE: A controlling interest in an entity owning Class 4A commercial property is transferred for consideration of $2.75 million. Since the consideration for the transfer of $2.75 million is excess of $2,500,000 but not in excess of $3,000,000, the applicable rate for determining the controlling interest transfer tax for the transfer is 2.5%. As such, the controlling interest transfer tax owed be the seller for the transfer is $68,750 (i.e. $2,750,000 multiplied by 2.5%).

For contracts or binding agreements entered into before July 10, 2025

The transfer of a controlling interest on or before November 15, 2025, in an entity which possesses, directly or indirectly, an interest in classified real property shall be subject to the controlling interest transfer tax equal to one percent of the consideration over $1,000,000 if the interest was transferred pursuant to a contract or other binding agreement that was fully executed before July 10, 2025. If the transfer pursuant to such an agreement occurs after November 15, 2025, the graduated tax rate prescribed above applies.

Refund Claims

If the interest was transferred pursuant to a contract or other binding agreement that was fully executed before July 10, 2025, any refund claims should be made by the purchaser or authorized agent. For deeds recorded on or after July 10, 2025, all refund claims should be made by the seller or authorized agent.

As a reminder, when filing a claim for refund of the Controlling Interest Transfer Tax, the Division requires:

1. A completed A-3170:
2. A copy of the CITT-1;
3. A letter explaining the request;
4. A copy of the signed contract/agreement for the transfer; and
5. Any additional documentation necessary to process the refund claim.