Short answer
It can. The Division of Taxation says nonresident sellers must pay an estimated Gross Income Tax of 2 percent of the sale price or 8.97 percent of the net gain, before or at closing, unless a listed exemption applies. Any overpayment is refunded when the nonresident return is processed, and an early refund can be requested.
What nonresidents have to do
The Division's guide says nonresident individuals, estates and trusts who sell New Jersey property must complete and sign form GIT/REP-1 or GIT/REP-2 to record the deed and close the sale. They must pay estimated Gross Income Tax in the amount of 2 percent of the consideration or 8.97 percent of the net gain, before or at the time of closing. The guide uses both measures and I did not find a page that says which one controls in each case, so the closing attorney should complete the form.
At closing or before
GIT/REP-1, with the estimated tax voucher, is submitted at closing with a check or money order payable to the State of New Jersey, Division of Taxation. A seller who prefers to prepay uses GIT/REP-2: the seller hand-delivers it with the payment to a Regional Information Center before closing, the Division certifies it, and the seller brings the stamped form to closing. The settlement agent then files the form and deed with the county clerk.
Exemptions and refunds
The guide says only the completed form is needed, with no payment, if the nonresident meets one of the seller's assurances on GIT/REP-3, for example claiming the principal residence exclusion. Otherwise nonresidents file an NJ-1040-NR for the year of the sale, and the Division refunds overpaid tax once the return is processed. Form A-3128, with proof of overpayment such as the settlement statement, can be used after closing to ask for an early refund.
A single-member LLC is not exempt
The guide adds that a nonresident single-member LLC that files as an individual for tax purposes must file GIT/REP-1 and submit the estimated payment. If an estate or trust is the seller, the forms are completed by the executor or trustee. Because a mistake can delay recording the deed, send the closing attorney your tax status and ownership documents early.
Selling a New Jersey house from far away
Many out-of-state owners want a quick, simple sale. Kaizen Home Buyers makes cash offers on New Jersey houses as-is, with no repairs and no agent commission. We can give an offer within 24 hours and close in 14 to 30 days or on the date you choose. Call 267-329-0084. Ask your tax professional what estimated payment applies to you. Listing locally with an agent is another way to sell if you can manage showings and repairs from a distance.