Tax Sale General Information
About Annual Tax Sales
As a statutory officer of the State of New Jersey, the tax collector is obligated to follow all state statutes regarding property tax collection, including billing, due dates, interest on delinquent tax payments, and tax sale procedures. The tax collector is required by state law to hold a tax sale each year for the prior year's unpaid municipal charges. If you do not pay your property taxes, a lien will be sold against the property for any unpaid taxes owed from the previous year. This includes sewer charges or any other municipal charges. Your property is not sold at the tax sale; a lien is placed on it.
People who buy these liens are looking to invest money. The interest rate starts at 18%. However, if there is more than one person interested in the same parcel, they will start bidding down the interest rate. Once the bidders bid down to 0%, it will go into a premium starting at multiples of $100. The lien holder pays the debt owed to the municipality by the assessed owner of the property and in return is guaranteed the interest rate on the amount paid when the lien is redeemed.
The lien holder will receive a legal document referred to as a tax certificate that must be recorded with the Essex County Hall of Records. The tax sale certificate that is issued is the detailed receipt of what the lien holder purchased at the tax sale. Clear title cannot be issued for a property with recorded liens on it. The certificate must be held for two years from the date of sale before the lien holder may start to foreclose on the property. The homeowner has the right to redeem the tax sale certificate any time prior to the final judgment being filed. Liens must be redeemed in full with guaranteed funds.