Owner guide
Selling NJ Commercial Property as a Nonresident: GIT/REP Forms and the “Exit Tax”
If you live outside New Jersey and own a building here in your own name, the deed won’t record without a GIT/REP form, and often a payment at closing. Here is what that payment is, when an LLC seller skips it, and how to get money back.
It is a prepayment, not an extra tax
What people call New Jersey’s “exit tax” is an estimated income tax payment collected at closing. Nonresident individuals, estates and trusts that sell New Jersey real property pay it unless an exemption or waiver applies. You then settle up on your New Jersey nonresident return for the year of the sale. TB-57(R)
The payment is the greater of 2% of the consideration, or the gain times the highest New Jersey income tax rate, which the current GIT/REP-1 instructions and the Division’s GIT/REP FAQ list as 10.75%. The settlement agent, usually the buyer’s attorney or the title company, collects it with Form GIT/REP-1 and sends it with the deed to the county clerk. Form GIT/REP-1
Which form you sign
GIT/REP-1: nonresident individual, estate or trust that owes the estimated payment.
GIT/REP-3: the seller certifies New Jersey residency or claims an exemption. Residents and many sellers who owe nothing sign this one.
GIT/REP-4: a waiver request sent to the Division before closing, for cases the GIT/REP-3 does not cover, such as a sale at a capital loss.
The county clerk will not record the deed without the right form. Sources: GIT/REP-3 · GIT/REP-4 · GIT/REP FAQ
Selling through an LLC or corporation
Most commercial buildings are owned by an entity. TB-57(R) says sellers that are corporations, partnerships, S corporations, limited liability companies or other entities taxed as a corporation or partnership check box 5 on the GIT/REP-3, and no estimated payment is collected at closing. That does not mean the entity’s owners owe nothing; it means the tax is handled on the entity’s and owners’ returns. The Division’s GIT/REP FAQ gives the same answer for a single-member LLC: it can sign the GIT/REP-3 and check box 5. If you own the building in your own name rather than through the LLC, the nonresident rules above apply to you. GIT/REP FAQ
1031 exchanges and loss sales
Exchanging into like-kind property: the seller checks box 7a on the GIT/REP-3, and box 7b if only like-kind property is received. If there is boot, the seller either pays 2% of the non-exempt part with a GIT/REP-1 at closing or makes an estimated payment afterward. If the exchange falls through, New Jersey expects the gain on the return for that year.
Selling at a loss: request a GIT/REP-4 waiver. The Division recommends sending it at least 14 days before closing, with the old deed, the proposed deed, the settlement statement and a letter explaining the loss. A waiver cannot be requested once the deed is recorded.
Planning an exchange? Our 1031 exchange guide for NJ commercial owners covers the federal timelines. Source: TB-57(R)
Example numbers only: a Parsippany office condo
The figures below are made up to show the math. They are not a real property or an AcreX deal.
Say a Florida resident owns an office condo in Parsippany in her own name and sells it for $1,200,000. Her gain, after basis and selling costs, is about $300,000. The gain times 10.75% is $32,250, and 2% of the price is $24,000, so about $32,250 is collected at closing with the GIT/REP-1. When she files her New Jersey nonresident return, the actual tax is worked out and any overpayment comes back as a refund.
Second example: the same condo is titled in an LLC she formed to hold it. The LLC signs the GIT/REP-3 and checks box 5, and nothing is collected at closing. The gain is still reported on the tax returns that apply to the LLC and its owner.
Getting an overpayment back
If too much was paid, file the New Jersey nonresident return (NJ-1040NR) for the year of the sale, or send Form A-3128, the claim for refund of the estimated payment, which the Division calls the quicker method. You still file the NJ-1040NR. Source: TB-57(R), refund claims
Where AcreX fits
We are brokers, not tax advisers. We raise the seller’s residency and ownership structure at listing, so the closing attorney and your accountant have time to pick the right form and, if it applies, file a waiver. See how to sell commercial property in NJ.
Owner questions
How much is the NJ “exit tax” on a commercial sale?
For a nonresident individual, estate or trust, the estimated payment is the greater of 2% of the sale price or the gain times the highest New Jersey income tax rate. It is a prepayment toward the nonresident return, not a separate tax.
Does an LLC seller pay the 2% at closing?
Generally no. Corporations, partnerships and LLCs, including single-member LLCs, sign the GIT/REP-3 and check box 5, so the estimated payment is not collected at closing.
What if I am selling at a loss?
Request a waiver on Form GIT/REP-4 before closing. The Division recommends sending it at least 14 days ahead.
Talk to AcreX
Book a consultation with Jonathan Libock · Call (201) 694-6463 · jon@acrex.co
By Jonathan Libock, AcreX · General information, not tax or legal advice. Sources: NJ Division of Taxation Technical Bulletin TB-57(R) (revised June 2026), Forms GIT/REP-1 (rev. 10-21), GIT/REP-3 and GIT/REP-4 and the GIT/REP FAQ (updated September 28, 2026). Checked November 10, 2026.
AcreX Realty LLC, Licensed Real Estate Broker, 307 Bloomfield Ave, Caldwell, NJ 07006. Licensure does not imply endorsement. In New Jersey commissions are negotiable.