Selling Inherited Property in NJ: Inheritance Tax Waivers (Form 0-1/L-9)

The short answer: When a New Jersey resident dies owning New Jersey real estate, the state's Transfer Inheritance Tax is a lien on that property for 15 years unless the tax is paid or secured first. To move the property out of the decedent's name, the estate needs a tax waiver (Form 0-1), and only the NJ Division of Taxation can issue one (Division of Taxation, Tax Waiver Requirements). If every beneficiary is a Class A beneficiary (spouse or civil union partner, children, grandchildren, parents and similar close relatives), the executor can usually request the real estate waiver by filing Form L-9 instead of a full return (Form L-9).

This matters to agents because the waiver is part of clearing title. For how title problems surface in general, see chain of title and clouds on title.

General information, not tax or legal advice. The estate's attorney and the Division of Taxation decide what must be filed.

Why does an inherited NJ home need a tax waiver?

The Division explains that the inheritance tax "is a lien on all property owned by the decedent as of the date of their death for a period of 15 years," whether or not any tax is actually assessed (citing N.J.S.A. 54:35-5 and 54:35-19). With certain exceptions, nobody may transfer a resident decedent's assets to a beneficiary without the Director's written consent, which is the waiver (Tax Waiver Requirements).

The Form 0-1 waiver releases both the inheritance tax lien and the older estate tax lien. New Jersey no longer imposes an estate tax for deaths on or after January 1, 2018, but the inheritance tax can still apply (Division of Taxation, Inheritance and Estate Tax). The Division's executor guide puts it plainly: "Real Estate transfers always require Form 0-1" (A Guide to Being an Executor).

Who signs the listing and the deed for an estate?

Usually the court-appointed fiduciary signs. County surrogates (or the Superior Court) admit wills to probate and grant letters testamentary to an executor (N.J.S.A. 3B:3-17). When there is no will, they grant letters of administration to an administrator (N.J.S.A. 3B:10-1).

Unless the will or the court order says otherwise, a fiduciary has the power to sell the decedent's real property at public or private sale and to sign deeds. That power does not reach property the will specifically gives to someone (N.J.S.A. 3B:14-23(e), (q)). Ask for a copy of the letters before you take the listing. The estate's attorney confirms who has authority.

When can the estate use Form L-9?

Form L-9 is an affidavit that asks the Division to issue the 0-1 waiver for real estate. It can be signed by the executor, administrator or a joint tenant of the property. Every beneficiary of the estate must be Class A (Form L-9):

• Spouse or civil union partner
• Child (including a legally adopted child), grandchild, great-grandchild
• Parent or grandparent
• Stepchild (not step-grandchildren)
• Domestic partner (on or after July 10, 2004)

The form can't be used if any asset worth $500 or more goes to someone outside Class A, if a "mutually acknowledged child" relationship is claimed, or if any inheritance or estate tax is due. A trust may lead the Division to require a full return. The filing includes copies of the will, the deed, the letters and the death certificate. L-9 itself is not the waiver, and the form says not to file it with the County Clerk (Form L-9). If the owner lived in another state, the matching form is L-9 NR.

What if some heirs are not Class A?

Then the estate generally files an inheritance tax return. Brothers, sisters and children-in-law (Class C) are taxed after built-in exemptions. Nieces, nephews, friends and other non-relatives (Class D) are taxed. Charities (Class E) are exempt. If any Class C, D or E beneficiary is involved, a full return is needed. Tax is due within eight months of the date of death, or interest runs at 10% a year. The Division says processing takes "at least several months," and about 40–50% of returns get an audit (Executor guide). Build that into any closing-date conversation.

Which sales don't need a real estate waiver?

The Division lists several "non-waiver situations" (Tax Waiver Requirements). The ones agents run into most:

• Tenancy by the entirety. When a married couple or civil union partners held title this way, the survivor's ownership is not treated as a transfer, so no waiver is needed. How that form of title is created is covered in property ownership on the NJ exam.
• Trust-owned property. Assets titled in a bona fide trust at death don't need a waiver.
• Entity-owned property. Real property owned by an LLC, closely held corporation or bona fide partnership doesn't need a waiver.

One more trap: Form L-8, the self-executing waiver, works for bank and brokerage accounts. It can't be used to transfer real estate (Definitions).

What should the listing agent do?

1. Read the deed and note how title was held (types of deeds).
2. Ask who has authority: executor or administrator, and whether letters have been issued.
3. Ask what has been filed: L-9, a full return, or nothing yet, and whether a 0-1 has arrived.
4. Bring in the title company and the attorneys early (title insurance explained; NJ attorney review).
5. Don't give tax advice or promise a closing date that depends on the Division (where agents must stop). Questions go to the Inheritance and Estate Tax Branch at (609) 292-5033.

Probate and transfer of title are part of New Jersey pre-licensing. Business Elementary's 75-hour pre-licensing course covers them.

Sources

• NJ Division of Taxation, Tax Waiver Requirements (N.J.S.A. 54:35-5, 54:35-19, 54:38-6; N.J.A.C. 18:26-11.1 to -11.25): https://www.nj.gov/treasury/taxation/inheritance-estate/estatetax.shtml
• NJ Division of Taxation, Inheritance and Estate Tax: https://www.nj.gov/treasury/taxation/inheritance-estate/inheritance.shtml
• NJ Division of Taxation, A Guide to Being an Executor: https://nj.gov/treasury/taxation/documents/pdf/guides/General-%20Guide-to-Being-an-Executor.pdf
• Form L-9, Affidavit for Real Property Tax Waiver (Resident Decedent): https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/itl9.pdf
• Form L-9 NR (Non-Resident Decedent): https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/itl9nr.pdf
• NJ Division of Taxation, Inheritance and Estate Tax Definitions (Form 0-1, Form L-8): https://www.nj.gov/treasury/taxation/inheritance-estate/definitions.shtml
• N.J.S.A. 3B:3-17 (probate and letters): https://law.justia.com/codes/new-jersey/title-3b/section-3b-3-17/
• N.J.S.A. 3B:10-1 (letters of administration): https://law.justia.com/codes/new-jersey/title-3b/section-3b-10-1/
• N.J.S.A. 3B:14-23 (fiduciary powers): https://law.justia.com/codes/new-jersey/title-3b/section-3b-14-23/

Last reviewed: November 8, 2026