(TRENTON) – Legislation sponsored by Patrick J. Diegnan Jr. (D-Middlesex) designed to push a sluggish real estate market while helping property owners avoid unnecessary bureaucracy when selling certain homes and seasonal rentals is now law.
The law (A-2748) exempts the sale of seasonal rentals and other single dwelling properties from the bulk sale notification requirements.
“Before this law, the state treated a sale of a vacation residence like a sale of the assets of a business and required tax clearance from the Treasury Department before you could close,” said Diegnan. “It was both a complicated and scary process. In this market, it may well have killed many transactions. This law stops unnecessary bureaucracy and protects the real estate market.”
The bulk sale notification requirements were created in 2007 to ensure the state was able to collect taxes owed by a business, before a substantial part of its assets were sold.
While it ensured the proper payment of tax in commercial transactions, the law mandating the requirements added an unnecessary layer of complication to home sales. Purchasers had to notify the state Division of Taxation of the sale at least ten days before the transfer of goods or payment, or would risk being held liable for taxes owed by the seller.
The law sponsored by Diegnan exempts sales of one- and two-family homes and single noncommercial dwelling units, whether those units are detached homes, condominiums or coops; and sales of seasonal rental units and seasonal leases from the notification requirements.
The law will take effect immediately and will apply retroactively to sales, transfers and assignments on or after August 1, 2007.