A3190

An Act establishing a local realty transfer fee on property located in certain municipalities, and amending and supplementing P.L.1968, c.49.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 2 of P.L.1968, c.49 (C.46:15-6) is amended to read as follows:

2. In addition to other prerequisites for recording, no deed evidencing transfer of title to real property shall be recorded in the office of any county recording officer unless it satisfies the following requirements:

a. If the transfer is subject to any fee established under section 3 of P.L.1968, c.49 (C.46:15-7) [or], section 2 of P.L.2003, c.113 (C.46:15-7.1), or section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), a statement of the true consideration for the transfer shall be contained in the deed, the acknowledgment, the proof of the execution, or an appended affidavit by one of the parties to the deed or that party's legal representative.

b. If the transfer is exempt from any fee established under section 3 of P.L.1968, c.49 (C.46:15-7) [or], section 2 of P.L.2003, c.113 (C.46:15-7.1), or section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), an affidavit stating the basis for the exemption shall be appended to the deed.

c. If the transfer is of real property upon which there is new construction, the words "NEW CONSTRUCTION" in upper case lettering shall be printed clearly at the top of the first page of the deed, and an affidavit by the grantor stating that the transfer is of property upon which there is new construction shall be appended to the deed.

(cf: P.L. 2004, c.66, s.2)

2. (New section) a. A municipality that is a city of the first class, by ordinance, may impose a local realty transfer fee on the conveyance or transfer of real property within the municipality, to be paid to the county recording officer by the grantor at the time the deed is offered for recording, in the amount of $0.50 per $500 of consideration or fractional part thereof recited in the deed. The local realty transfer fee authorized by this section shall be in addition to the realty transfer fees imposed by P.L.1968, c.49 (C.46:15-1 et seq.), section 2 of P.L.2003, c.113 (C.46:15-7.1), and section 8 of P.L.2004, c.66 (C.46:15-7.2). A municipality that adopts an ordinance pursuant to this section shall forward to the county recording officer a certified copy of the ordinance. An ordinance so adopted shall provide that the imposition of the local realty transfer fee shall apply to conveyances and transfers of real property occurring on or after the first day of the third month next following the date of the transmittal to the county recording officer.

b. The proceeds of the local realty transfer fee collected by the county recording officer pursuant to this section shall be accounted for and remitted to the county treasurer. The county treasurer shall pay to the chief financial officer of the municipality, for the use of the municipality, the amount of local realty transfer fee revenue collected by the county recording officer on the tenth day of each month following the month of collection.

c. The local realty transfer fee imposed by subsection a. of this section is not applicable to a conveyance or transfer that is:

(1) made by a deed described in section 6 of P.L.1968, c.49 (C.46:15-10);

(2) the sale of any one- or two-family residential premises which are owned and occupied by a senior citizen, blind person or disabled person who is the seller in such transaction; provided, however, that except in the instance of a husband and wife no exemption shall be allowed if the property being sold is jointly owned and one or more of the owners is not a senior citizen, blind person or disabled person;

(3) the sale of low and moderate income housing; or

(4) concerning property owned by an organization determined by the federal Internal Revenue Service to be exempt from federal income taxation pursuant to paragraph (3) of subsection (c) of section 501 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.501).

d. A fee imposed by subsection a. of this section is subject to the provisions of the State Uniform Tax Procedure Law, R.S.54:48-1 et seq.

e. Every deed subject to the fee imposed by subsection a. of this section, which is in fact recorded, is conclusively deemed to have been entitled to recording, notwithstanding that the amount of the consideration was incorrectly stated, or that the correct amount of the fee was not paid, and no such defect shall in any way affect or impair the validity of the title conveyed or render the same unmarketable; but the person or persons required to pay that supplemental fee at the time of recording shall be and remain liable to the county recording officer for the payment of the proper amount thereof.

3. This act shall take effect immediately.

STATEMENT

This bill permits a municipality that is a city of the first class, by ordinance, to impose a local realty transfer fee on the conveyance or transfer of real property within the municipality, to be paid to the county recording officer by the grantor at the time the deed is offered for recording, in the amount of $0.50 per $500 of consideration or fractional part thereof recited in the deed. The local realty transfer fee would be in addition to the realty transfer fees currently imposed by law.

Under the provisions of the bill, a municipality that adopts an ordinance imposing a local realty transfer fee must forward to the county recording officer a certified copy of the ordinance. The ordinance must provide that the imposition of the local realty transfer fee shall apply to conveyances and transfers of real property occurring on or after the first day of the third month next following the date of the transmittal to the county recording officer.

Under the bill, the proceeds of the local realty transfer fee collected by the county recording officer must be accounted for and remitted to the county treasurer. The county treasurer is required to pay to the chief financial officer of the municipality, for the use of the municipality, the amount of local realty transfer fee revenue collected by the county recording officer on the tenth day of each month following the month of collection.

Under the provisions of the bill, the local realty transfer fee cannot be imposed on a conveyance or transfer that is:

(1) made by a deed described in section 6 of P.L.1968, c.49 (C.46:15-10);

(3) the sale of low and moderate income housing; or