NJ Mixed-Use Buildings Avoid Mansion Tax After Reclassification

Two New Jersey mixed-use buildings with views of Manhattan are better classified as apartments rather than commercial buildings because their predominant use is residential, the state tax court ruled Monday.

The New Jersey Tax Court’s change in classification for tax year 2026 will allow the owner of the Edgewater property to avoid paying the state’s realty transfer fee—commonly known as the mansion tax—on an impending sale, as apartments but not other commercial buildings are exempt. The court adopted a predominant use test to determine how to classify properties with multiple uses for assessment purposes, noting this was a question of ...