New Jersey’s 2025–26 Budget: What Business Owners Need to Know

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Strategic insights from tax policy to healthcare spending — plus the real story behind NJ’s financial health

Governor Murphy signed New Jersey’s largest budget yet — a $58.8 billion spending plan loaded with tax relief, healthcare funding, and infrastructure investments. But for small business owners, real estate professionals, and medical practices, the fine print holds just as much weight as the headlines.

Here’s what matters for your business — and how to get ahead of the changes.

🏠 The Mansion Tax Expansion — and Why It’s Not Just for Millionaires

New Jersey’s so-called “mansion tax” — a one-time 1% fee on residential property sales over $1 million — got an important update this year. Starting in 2026, an additional progressive transfer fee applies to homes over $2 million, with rising rates depending on the sale price. While that might sound like it only impacts ultra-wealthy buyers, here’s the catch:

🏡 One in eight homes in NJ now exceeds $1M in value, especially in counties like Bergen, Essex, Morris, and Hudson — driven by market appreciation, not just luxury builds.

🔑 For real estate investors and developers, this affects exit strategy math and deal pricing. For business owners looking to sell or relocate, it may increase transaction costs.

🏥 Healthcare Funding & Medicaid Changes — What Medical Practices Should Watch

The 2025–2026 budget includes a substantial boost in healthcare spending, with an emphasis on:

• Medicaid/NJ FamilyCare expansion, particularly around maternal and behavioral health services.

  
  

• Support for hospitals and long-term care facilities, including funding for workforce development.

  
  

• A renewed focus on opioid settlement spending — though critics have raised concerns about transparency.

  
  

📌 Why it matters: If you operate a medical practice, the shifting Medicaid reimbursements and patient mix could impact billing cycles and RCM planning. For private clinics, this may mean re-evaluating payer mix and outreach strategies to stay competitive.

💵 Main Street Recovery Programs Are Shrinking Fast

The Main Street Recovery Fund, a key source of grants for lease reimbursements and tech upgrades, was reduced from $26.5M to $9M this year.

While some programs remain available, including:

• Lease assistance

  
  

• E-commerce transition grants

  
  

…funding is tighter and demand is high.

📌 Why this matters: If you’ve been delaying a lease renegotiation, system upgrade, or storefront revamp, now is the time to apply before the remaining funds are gone.

📈 New Capital Gains Tax Break for NJ Entrepreneurs

Buried in the budget is a big win for founders and small business investors: New Jersey will now align with the federal Qualified Small Business Stock (QSBS) exclusion, offering 0% state tax on capital gains for stock held at least five years (if it qualifies under IRS rules).

📌 Why this matters: If you’re building a business with long-term exit potential — or investing in one — this tax break could save six or even seven figures. But the QSBS clock only starts when you structure things properly.

✅ Tip: Consult your CPA or legal advisor now to ensure you meet the eligibility and holding period rules.

📉 NJ’s Financial Picture Isn’t as Strong as It Seems

Yes, the state is projecting a $6.1B surplus, but the real picture is more complex. According to the New Jersey Society of CPAs (NJCPA), New Jersey has:

• A negative net position of –$158.7B

  
  

• Over $200 billion in long-term liabilities (pensions, retiree healthcare, etc.)

  
  

• The worst net position in the region, despite record revenues

  
  

📌 Why this matters: Generous relief and grant programs may not last forever. Understanding the state’s structural deficits can help you plan for future tax increases or reduced support programs in the years ahead.

Budget headlines only tell half the story.

The NJCPA’s plain-language summary of the state’s ACFR reveals the deeper challenges shaping NJ’s fiscal future — including over $200B in obligations and a $158B deficit. Smart business owners are reading between the lines.👉 Check out the full summary

🧠 Final Thoughts

New Jersey’s 2025–26 budget isn’t just about headlines — it’s full of buried updates that could directly affect your business, whether you're planning to grow, invest, sell, or simply stay compliant.

✅ Real estate professionals should factor the expanded mansion tax into pricing and deal structures

✅ Healthcare practices must stay alert to Medicaid changes and evolving patient demographics

✅ Small business owners still have time to tap into Main Street funding — but not for long

✅ Founders and investors can now take advantage of NJ’s new QSBS capital gains exclusion

✅ And for everyone — understanding the state’s underlying fiscal health is critical for making long-term, tax-smart decisions

Cam Betancourt, CPA

Founder, Betancourt Business Advisors