![]() An Affidavit of Consideration for Use by Seller, Form RTF-1, must be filed with any deed in which a full or partial exemption is claimed from the RTF. The RTF applies to every conveyance of title to real property in New Jersey, unless the deed or transfer meets an exemption. The RTF is calculated based on the amount of consideration recited in the deed, or in certain instances, the assessed valuation of the property conveyed, divided by the Director's Ratio. In order to avoid any possible adverse financial impact that may result from failure to comply with the filing of the necessary forms and payment of the Controlling Interest Transfer Tax, if applicable, competent legal advice should be sought when contemplating a non-deed sale or transfer of a controlling interest of an entity in New Jersey.The State imposes a Realty Transfer Fee (RTF) on the seller of real property for recording a deed for the sale. The Controlling Interest Transfer Tax does not apply in the following situations: (a) transfers by or to the United States, the State of New Jersey, or any of their instrumentalities, agencies or subdivisions (b) a purchase by a tax exempt entity under Section 501(c)(3) of the Internal Revenue Code (c) transactions exempt from the Realty Transfer Fee enumerated in N.J.S.A 46:15-10 and transactions incidental to a corporate merger or acquisition if the equalized assessed value of the real property transferred is less than 20% of the total value of all assets exchanged in the merger or acquisition. A separate statement of waiver, Form CITT-1E, must be filed if an exemption is claimed. The buyer must file a return on Form CITT-1 with the New Jersey Division of Taxation. ![]() The Controlling Interest Transfer Tax is due on or before the last day of the month following the month in which the sale or transfer of the controlling interest is completed. If a series of transactions occurs over a period of six months in either of the two foregoing sale or transfer scenarios, the series of transactions is presumed to be a single sale or transfer and is subject to the Controlling Interest Transfer Tax. In the case of a sale or transfer of a controlling interest in an entity which, in addition to an interest in classified real property, also possesses, directly or indirectly, interests in other property (real or personal), a tax is due on the sale or transfer only if the equalized assessed value of the classified real property exceeds $1,000,000, in which event the buyer pays a tax equal to 1% of the equalized assessed value of the classified real property that is equal to the percentage of the ownership interest sold or transferred. It does not apply to vacant land, multi-family or industrial properties. Classified real property means Class 4A commercial property (e.g., office buildings and shopping centers). A "controlling interest" is defined to mean, in the case of a corporation, more than 50% of the total combined voting power of all classes of stock of the corporation and, in the case of a partnership, association, trust or other organization, more that 50% of the beneficial ownership of the commercial real property of that entity. Essentially, upon the sale or transfer of a controlling interest in an entity which possesses, directly or indirectly, an interest in "classified" real property for consideration in excess of $1,000,000, a tax is payable by the buyer of the controlling interest in the amount of 1% of the consideration. The Controlling Interest Transfer Tax was enacted in 2006. ![]() However, non-deed transfers of interests in certain entities that own real property may result in a Controlling Interest Transfer Tax being imposed on the buyer. Real Estate & Commercial Financing TransactionsĪt the recording of a deed for the transfer of real property in New Jersey, the Realty Transfer Fee is imposed on the seller and the Mansion Tax may be imposed on the buyer.Financial Incentives & Economic Development. ![]() Energy, Renewable Resources & Sustainable Development.Employee Benefits & Executive Compensation.Criminal Defense & Regulatory Compliance.Construction Contracting & Risk Management.Banking & Financial Services Litigation.
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