New Jersey Just Raised Taxes on Luxury Homes and Gambling: Here’s What You Need to Know

New Jersey homeowners, real estate investors, and gamblers — a major shift is here.

You want to enjoy your property, your winnings, and your lifestyle without surprises. But a new state budget just changed the rules — and if you’re not informed, it could cost you.

The Problem: A $1.2 Billion Deficit

New Jersey faced a massive shortfall going into fiscal 2026. Without action, vital programs could suffer, and the financial burden might shift unexpectedly in the future.

Governor Murphy’s Budget Strategy

Governor Phil Murphy, in his final year in office, stepped in with a plan: a $58.8 billion state budget designed to stabilize New Jersey’s finances — without imposing widespread taxes on everyday activities like mini-golf and bowling. His administration dropped the unpopular “fun tax” proposal after backlash, and instead zeroed in on high-end assets.

The Plan: Raise Revenue from Luxury and Vice

Here’s what’s changing:

• Luxury Real Estate (The Mansion Tax):
  Homes sold for over $2 million will now face steeper taxes, scaled by price:
  • $2M–$2.5M: 2%
  • $2.5M–$3M: 2.5%
  • $3M–$3.5M: 3%
  • Over $3.5M: 3.5%
    Properties between $1M–$2M stay at the current 1% rate.
• Online Gambling and Sports Betting:
  Tax rates jump from 13–15% up to 19.75%, lower than the proposed 25%, but still a big increase.
• Nicotine Products:
  Cigarette taxes increase from 13.5¢ to 15¢ per stick ($3 per pack), and liquid nicotine taxes triple to 30¢ per mL.
• Senior Property Tax Relief:
  The budget includes $280 million for the Stay NJ program, giving seniors (earning under $500K/year) a 50% property tax credit—up to $6,500 on their primary home.

The Stakes: Who Wins, Who Pays

If you’re a luxury homeowner, developer, gambler, or smoker in New Jersey, these changes directly affect your bottom line. But for seniors, the news brings relief and incentive to stay put.

Stay Informed, Stay Ahead

Don’t wait until the closing day or tax season to find out how these new laws hit your wallet. Talk to your HBK State and Local Tax Team now to prepare.