New Jersey Tax Lien Sales

Lien State

In contrast to most other states, New Jersey tax lien sales are handled by the local or municipal governments rather than the county government. There are 567 municipalities (cities, townships,or Boroughs) in New Jersey. Approximately 98% hold annual tax lien sales as a mechanism to collect delinquent (previous year’s assessments) property taxes.

Tax Lien Sales:

New Jersey tax lien sales begin in April and continue through December, with most municipalities holding sales between June and October. All bids must be presented in person. The tax lien sale is conducted in the form of an auction. The opening bid is the maximum interest rate of return mandated by statute (18% per annum) on a sale price that includes one year’s tax, interest, and penalty. The percentage rate is then bid down, with the tax lien certificate being assigned to the bidder who is willing to accept the lowest rate of return for his/her investment. Should 0% be offered, then premium bids in excess of the tax, interest and penalties are accepted. Most tax collectors specify the payment at the end of the sale to be in cash, money order, or certified check. Many tax collectors will allow an irrevocable letter of credit from an established financial institution, listing the credit line reserved, if arrangements are made a week or more in advance. Ten days after the sale, the tax lien certificate holder can then purchase any current year’s delinquent taxes due on parcels for which they have previously purchased liens and receive 18% on their investment regardless of the certificate percent bid at auction. It would be wise to purchase and attach all available taxes, thereby increasing the overall yield. The property owner has two years from the time of sale to redeem before foreclosure can be started. A vast majority (over 90%) of liens are redeemed. At redemption, the tax lien certificate holder will receive: • Amount of certificate at the redemption rate bid, or the return of premium paid. • Plus, a 2%, 4%, or 6% penalty as determined by the amount of the certificate purchase. • Plus, any recording fees, etc. Plus, any subsequent taxes paid at 18% per annum. • In addition, certain municipalities may attach an additional 6% penalty on property owners if the total tax is over $10,000 in any one year.

Tax Sale Type: Tax Lien Certificates Sec. 54:5-46)

Contact: County Tax Collector (Sec. 54:5-19)

Interest Rate: 18% per annum (Sec. 54:5-61 and (Sec. 54:5-32)

Penalty Rate: 4% – 6% (Sec. 54:5-61 and (Sec. 54:5-32)

Bid Procedure: Bid Down (Sec. 54:5-32)

Redemption Period: Two (2) years (Sec. 54:5-86) Law: New Jersey Revised Statutes, Title 54, Subtitle 2, Chapter 5, “Tax Sale Law.”

Additional Notes:

Amount to Redeem: According to (Sec. 54:5-32) the ‘sale shall be made in fee to such person who will purchase the property, subject to redemption at the lowest rate of interest, but in no case in excess of 18% per annum. If at the sale a person shall offer to purchase subject to redemption at a rate of interest less than 1%, he may, in lieu of any rate of interest to redeem, offer a premium over and above the amount of taxes, assessments or other charges, as in this chapter specified, due the municipality, and the property shall be struck off and sold to the bidder who offers to pay the amount of such taxes, assessments or charges, plus the highest amount of premium….’

In addition, according to (Sec. 54:5-61): When the tax title certificate amount shall exceed the sum of two hundred ($200) dollars, the holder, upon redemption of the tax title. shall be entitled to collect from the owner or other person having an interest in the lands an additional sum equal to two percent of the amount so paid for the tax title certificate. Furthermore, according to (Sec. 54:5-62), when the tax title certificate amount shall exceed the sum of $5,000, such additional sum shall be equal to 4% of such amount paid; and when the tax title certificate amount exceeds $10,000, such additional sum shall be equal to 6% of such amount paid. This section shall also apply to all existing tax title certificates held by municipalities on the effective date of P.L.1991, c.75.

Counties / Municipalities located in New Jersey

The following is a list of counties located in the state of New Jersey. Tax lien certificates for properties located in the following counties are sold at New Jersey county tax sales. Learn more about each county’s individual tax sale process by clicking on the name of the county for which you are interested from the list below: