New Jersey Inheritance Tax | What You Need to Know in 2025
If you’ve recently inherited property or assets—or expect to in the future—you may be wondering: does New Jersey have an inheritance tax? Unfortunately, yes. New Jersey is one of only a handful of states that still imposes an inheritance tax.
In this guide, we’ll break down what the New Jersey inheritance tax is, who has to pay it, how much it costs, exemptions, and how it might affect decisions like keeping or selling an inherited home. If you’re feeling overwhelmed, don’t worry—we’ve got simple explanations, useful examples, and helpful resources to guide you through.
🧾 What Is the New Jersey Inheritance Tax?
The New Jersey inheritance tax is a state-level tax imposed on the beneficiaries (not the estate) when they inherit money, property, or other assets from a deceased person.
While New Jersey eliminated its estate tax in 2018, the inheritance tax remains in effect.
This means that:
- Your inheritance could be taxed depending on your relationship to the deceased.
- Rates vary from 11% to 16% based on the amount and class of beneficiary.
👨👩👧👦 Who Has to Pay Inheritance Tax in New Jersey?
New Jersey classifies beneficiaries into four categories:
| Class | Relationship to Decedent | Inheritance Tax Owed? |
|---|---|---|
| A | Spouse, parents, grandparents, children, grandchildren | Exempt from tax |
| C | Siblings, in-laws (e.g., son/daughter-in-law) | Taxed on amounts over $25,000 |
| D | Friends, cousins, distant relatives | Taxed starting from $1 |
| E | Charities, religious or educational institutions | Fully exempt |
✅ Example:
If you inherit a house from your brother in New Jersey, you’re a Class C beneficiary. You pay no tax on the first $25,000, but anything above that is taxed at progressive rates (11%–16%).
📊 Inheritance Tax Rates in New Jersey
Here’s how the rates break down for Class C and D beneficiaries:
Class C Rates:
- 11% on $25,001 – $1,075,000
- 13% on $1,075,001 – $1,725,000
- 14% on $1,725,001 – $2,275,000
- 16% on amounts over $2,275,000
Class D Rates:
- 15% on first $700,000
- 16% on amounts over $700,000
💡 Important: These rates apply only to the portion that exceeds the exemption (if any).
🏠 Inherited Real Estate & The Inheritance Tax
Let’s say you inherit a house in New Jersey from an aunt (Class D). You may be required to pay inheritance tax on the full assessed value of the home.
For many people, the big question is:
Should I keep the property or sell it quickly to avoid maintenance, taxes, and legal complexity?
We help people in exactly this situation. At I Will Buy Your House for Cash, we buy inherited homes as-is, with no repairs, no agent fees, and no showings required. Whether it’s a hoarder home, a property with code violations, or just one you don’t want to manage, we’ll make a fair cash offer and help you move on—fast.
Learn how to sell your house without repairs here.
📅 When Is the Inheritance Tax Due?
The inheritance tax return (Form IT-R) must be filed within 8 months of the date of death, and taxes must be paid within that same timeframe to avoid interest and penalties.
Failure to meet deadlines can result in:
- Delays in asset distribution
- Interest charges of 10% per year
- Liens placed on real estate
If you need to sell the house to pay the tax, don’t delay. We offer quick closes and cash payments so you can meet state deadlines.
📃 Filing Forms & Documentation
You can find official forms and resources on the New Jersey Division of Taxation’s website.
You’ll likely need:
- Certified copy of the death certificate
- Appraisals for real estate or valuable personal property
- Will and/or probate documentation
- Inheritance tax return (Form IT-R)
You may also need to obtain a waiver before transferring real estate or accessing financial accounts.
🔐 Are There Legal Loopholes or Ways to Avoid the Tax?
Here are a few strategies that are commonly used:
- Gifting assets before death (but gifts within 3 years of death are still taxable)
- Establishing trusts that change the ownership structure
- Naming beneficiaries as Class A individuals whenever possible
- Selling the house and distributing proceeds before probate (in some cases)
Always consult with an estate attorney or tax advisor before making financial moves around the inheritance tax. For general guidance, see:
💬 We Help Inheritors Across New Jersey
We’ve helped countless New Jersey residents who’ve inherited property they don’t want—or can’t afford to keep. Whether you’re dealing with a fixer-upper, a home full of belongings, or a court-ordered sale, our team will make the process stress-free and discreet.
See what past sellers had to say on our testimonials page.
🎯 Final Thoughts: Don’t Let the New Jersey Inheritance Tax Surprise You
If you’ve received an inheritance in New Jersey, especially real estate, you need to plan ahead. The New Jersey inheritance tax can significantly affect your payout—and your peace of mind.
💡 Thinking of selling an inherited property to avoid hassle or cover tax costs?
👉 Get your free, no-pressure cash offer today
We’ll help you move on quickly—with no repairs, no showings, and no fees.