So how many other states

18 years ago

have an exit tax? In my state, if you sell your house, to move to another state, at settlement you're assessed a TEN PERCENT exit tax by the state!!!!

We knew there was an exit tax, but had no idea it was that high. That's unbelievable--some people must end up paying out of pocket to sell their homes, by the time they have to pay off their mortgage, pay settlement costs, real estate commission and an exit tax. YIKES>

So glad we found an instate location to retire--we were originally planning to go out of state, but hey, knowing that, we're already ahead by 5+ years of property taxes, just by staying here and avoiding the ET.

And the 'smash and grab' on the middle class continues.....

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Comments (11)

casey_nfld
18 years ago
I've never heard of this before! (I'm from Canada) Wow, what a tax grab.
lindyluwho
18 years ago
I've never heard of this one. What state?

Linda
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maryanntx
18 years ago
I've never heard of that either and I'm from Texas.
gramzeeinmd
18 years ago
I have never heard about this and I am from Maryland who has the stupid side walk tax.
The sidewalk tax is for city and thank goodness I live in the county.
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azzalea
Original Author
18 years ago
This one's NJ. I was thinking about that assinine sidewalk tax when I heard about this.

With our incredible tax structure and cost of living, there are a lot of folks 'escaping', so apparently the powers that be figured this was a good way to cash in. Just heard of one poor guy who thought he'd found a way around it--NOT--at settlement he got charged $30,000 by the state.

I am SO glad we discovered a really nice place in the state that's on the receiving end of a lot of that tax money (Abbott school district, urban enterprise zone and they've got a deal with the state where they keep the sales tax collected there, etc--so they've got a lot of money to spend, and the property taxes are lower there)
rosebudms
18 years ago
Doesn't sound legal to me.
patruth
18 years ago
I thought that WA state had almost every tax ,but I never heard of an exit tax. We don't have an income tax either but I think we have the highest sales tax, gas tax and cigarette tax in the country. If not I'm sure were trying to. Thank God I quit smoking almost 20 years ago since cigarettes are $5.00 a pack.
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monica_pa Grieves
18 years ago
I never heard of an "exit" tax in NJ. When and how is this assessed? Nothing was asked, in the settlement papers, for my mothers new address when she sold her house in NJ, two years ago.
monica_pa Grieves
18 years ago
Okay...I just looked it up.
If you are moving out of state, the state treats you, the seller the same as a non-resident. That is, they require, at settlement, a withholding of 2% of the net proceeds from the sale.
I know this last as a fact, because this amount was withheld from my check at settlement when I sold a property in NJ two years ago. They do this, to insure that the out of state resident files a NJ state income tax the next year...which is when the capital gains tax is actually paid.
I filed a NJ return, and received a refund when the actual tax was computed and then subtracted from the amount withheld.

So, it's not a tax, just an estimated pre-payment of capital gains...and many people, like me, get a substantial refund after filing the next year's tax return.
azzalea
Original Author
18 years ago
I hope you're right Monica--but the person who told us about this had $30,000 of a 300,000 sale taken from him by the state at settlement. If you're correct, he's going to get one whopping refund next year!
carla35
18 years ago
My guess is the $30,000 was based on capital gains (and what the house was worth when bought, etc)...not 10% of the selling price now.