New Jersey is a very popular tax lien state. The interest rate is 18% per annum and the redemption period is two years. There is also a penalty in addition to the interest. The penalty is from 2-6% depending on the certificate amount, and is only paid on the certificate amount, not on subsequent tax payments.
New Jersey tax sales are conducted on the municipal level, not by the county. It is the municipal tax collector who is in charge of the tax sale. Most municipalities allow you to register for the tax sale immediately before the start of the sale. In some of the smaller municipalities, all you need to do is sign your name on a list of bidders and you don’t have to fill out a bidder information sheet or W-9 form unless you actually purchase a lien. Only the larger cities and towns require advanced registration in order to bid.
The bidding procedure is different from other states in that the interest rate is bid down and then the premium is up for bid. If you bid on the premium you don’t get any interest on the certificate amount, however you do get interest on the subsequent tax payments. Interest on subs is 8% per annum until $1,500 is owed, then it’s 18%. If you purchase a tax lien certificate that is $1,500 or more, all of your subs will earn 18% per annum.
Payment must be made immediately after the sale with cash, certified funds, or money order. A few of the more sophisticated municipalities will take payment by wire transfer, but most will not. Some tax collectors will not let you leave the sale to secure funds, so you must have them on hand.
There is a ten-day grace period after the sale in which the lien can be redeemed without penalty. The lien purchaser will have to wait until the ten-day grace period is over in order to pay any subsequent taxes. A “tax lien certificate” is issued to the lien purchaser within ten days and it must be recorded with the county clerk within three months of the sale. If the certificate is not recorded with the county, all you have is a piece of paper and no lien.
Leftover liens not sold at the tax lien sale may be sold “over the counter.” Liens may also be sold or “assigned” to another investor. If the lien is not redeemed within the two year redemption period the purchaser may start foreclosure on the property. Foreclosure proceedings in New Jersey can be complicated, and it’s best to secure the services of an attorney who specializes in tax lien foreclosures. If no foreclosure action is taken after twenty years from the date of the sale, the tax lien certificate is void.
There are hundreds of municipalities in New Jersey and they each have a tax sale once a year. There is very little information on tax sales for New Jersey municipalities online. For most municipalities, all you’ll find is the contact information for the municipal tax collector.
TSR has been enhancing the data we provide in New Jersey while continuing our tradition of providing superior tax sale data and resources. We now offer the following in this state:
- Current assessment data directly from the county
- Comprehensive environmental data and enhanced environmental hazard analyses
- FEMA flood data and enhanced flood hazard analysis
We are the only company in the tax sale industry providing the above data in New Jersey. Our assessment data is current, unlike many providers that offer data that can be up to a year old.
For more information regarding New Jersey tax sales or to view the current available tax sale lists, please visit http://www.taxsaleresources.com/Jurisdictionspage.aspx?state_id=33. Please feel free contact us directly at firstname.lastname@example.org if you have any questions or are interested in a particular municipality.