The End Hedge Fund Control of New Jersey Homes Act aims to impose a tax on certain investment purchases of residential properties by commercial entities, specifically targeting hedge funds. Under this bill, applicable taxpayers—defined as entities managing pooled funds from investors—will be taxed 50 percent of the fair market value of any covered residence they acquire. The bill outlines specific exceptions to this tax, including scenarios where the taxpayer owns a limited number of properties, the ownership interest is less than 50 percent, the property is unoccupied and acquired through foreclosure, or if the property is used as a primary residence by someone with a significant ownership interest in the taxpayer.

Additionally, the bill establishes a formula to determine the maximum number of residential units that can be owned by applicable taxpayers without incurring the tax, which gradually decreases over a ten-year period. For hedge fund taxpayers, the maximum permissible units will reduce more significantly compared to other applicable taxpayers. The Director of the Division of Taxation is tasked with adopting necessary regulations to implement the bill and is authorized to require reporting of relevant information from taxpayers. Failure to comply with reporting requirements may result in penalties, although the director has the discretion to waive these penalties under certain circumstances. The act is set to take effect five months after its enactment.