New Jersey Property Buyers Must Act Fast on Tax Refund Claims

A recent New Jersey Tax Court decision highlights the strict 90-day statute of limitations for mansion tax refund claims, presenting significant challenges for property buyers. Mike Puzyk, a partner in our Tax and Benefits team, discusses the DePina v. Dir., Div. case, in which the court ruled that a buyer who discovered misrepresentations about a property’s size years after a sale could not recover overpaid mansion tax due to the expiration of the claim period. This ruling highlights the critical need for property buyers and their attorneys to incorporate protective measures, such as including indemnification clauses in contracts and conducting thorough pre-purchase due diligence, to avoid similar issues. Legal counsel should advise clients to act quickly, as filing a refund claim immediately after purchase may be the only way to safeguard against potential overpayment, despite the complications it could introduce.