By Slava Zborovsky · Updated
To sell a house inherited from a New Jersey owner, the estate usually needs a tax waiver from the Division of Taxation to move the property out of the decedent's name; a home held as tenants by the entirety passes to the surviving spouse without one. New Jersey estate tax is not imposed for deaths on or after January 1, 2018, and for federal income tax your basis is the home's fair market value on the date of death, so a sale near that value produces little or no gain.
Do you need a tax waiver to sell an inherited house in NJ?
Usually, yes. The Division of Taxation says tax waivers "are required to transfer assets from a decedent's name to a beneficiary" and lists New Jersey real property among those assets. The exception is a home owned as tenants by the entirety: the Division says that "is not considered a transfer to the surviving spouse or civil union partner," so no waiver is needed.
The estate's attorney handles the waiver request. Slava plans the listing around it: a house can be prepared, photographed and priced while the waiver is pending, so the sale is ready to move when the paperwork is.
Is there an inheritance tax or estate tax on a house in New Jersey?
Estate tax: no, for deaths on or after January 1, 2018. In the Division's words, "New Jersey Estate Tax is no longer imposed for individuals who died on or after January 1, 2018."
Inheritance tax: it still exists, and whether it applies depends on the beneficiary's relationship to the person who died. The Division publishes the beneficiary classes; the estate's attorney or accountant applies them.
Do you pay capital gains when you sell an inherited house?
Only on the gain above your basis, and an inherited home's basis is generally its value on the date of death. IRS Publication 551 sets the basis of inherited property as "The FMV of the property at the date of the individual's death," or the alternate valuation date if the estate elects it.
A worked example, with illustrative numbers: a Ridgewood home inherited at $1.16M, the Ridgewood median over the 12 months of deeds through June 2026, and sold for the same price. The seller pays about $23,056 in state transfer charges ($11,481 Realty Transfer Fee and $11,575 Graduated Percent Fee), before commission and attorney fees. With the basis at the date-of-death value, that sale shows no gain. Your accountant confirms the figures for your return.
What does the estate pay to sell an inherited house?
The estate is the seller, so the seller's costs apply:
- The Realty Transfer Fee, and on sales over $1,000,000 the Graduated Percent Fee of 1% to 3.5%: the seller pays both (NJ Division of Taxation).
- A certificate of smoke alarm, carbon monoxide alarm and fire extinguisher compliance, required before a one or two family home is sold (N.J.A.C. 5:70-2.3).
- Commission and attorney fees, which are negotiated.
How do you value an inherited house in New Jersey?
Two numbers matter: what the house was worth on the date of death, for the basis, and what it will sell for now. Both start with recorded sales of similar homes nearby. Slava prepares a written market analysis from those sales for the family and its attorney; the home value check is a quick first look, and each town's market report shows every recorded sale.
When siblings share the house and do not all want to sell, or one wants to buy the others out, a clear number from recorded sales is usually what settles it.
Selling soon? Get a written valuation or use the NJ closing-cost calculator.
- Do I need an inheritance tax waiver to sell a house in NJ?
- Usually. The NJ Division of Taxation requires tax waivers to transfer New Jersey real property from a decedent's name to a beneficiary. Property held as tenants by the entirety passes to the surviving spouse without one.
- Does New Jersey have an estate tax in 2026?
- No. The Division of Taxation says New Jersey Estate Tax is not imposed for individuals who died on or after January 1, 2018. The separate inheritance tax still applies to some beneficiaries, depending on their relationship to the decedent.
- What is the basis of an inherited house?
- Generally its fair market value on the date of death, or on the alternate valuation date if the estate elects it, per IRS Publication 551.
Sources
Written by Slava Zborovsky, Broker Associate with The Agency One Rock and a licensed New Jersey broker since 2007. About Slava · LinkedIn
