State Summary

• Tax Collection Method: Liens
• Primary Bidding Type: Bid-down Interest and then Premium (if bid down to 0%)
• Redemption Period: 2 years
• Redemption Interest Rate/Flat Penalty: 18% (maximum) simple interest per annum + 2-6% flat penalty for each year during redemption period based on the municipality and the certificate amount
  

The following information summarizes the life cycle, requirements, and administering of tax liens in the state of New Jersey. Please read this information carefully. There are tax collection laws that pertain to all municipalities in New Jersey, but be aware that there are subtle differences between the municipalities as well. When the word "typical" is used in the FAQs below, it indicates that most municipalities use this procedure/follow this convention, but not all municipalities.

Is New Jersey a tax lien or a tax deed state?
New Jersey is a tax lien state.

What is the name of the local official whom typically collects property taxes in New Jersey?
Typically, the collector of property taxes in New Jersey is referred to as the Tax Collector.

When are property taxes due in the state of New Jersey?
Property taxes are paid in four equal installments in New Jersey. The tax bill with four coupons is mailed to taypayers in July. The quarterly bill due dates are August 1 and November 1, and February 1 and May 1 of the following year.

When do property taxes become delinquent in the state of New Jersey? 
Property tax bills become delinquent 10 days after the due dates. Interest on delinquent tax bills over $1,500 accrues at a rate of 18% per annum. For tax bills less than $1,500, interest accrues at 8% per annum. Flat penalties of 2%, 4% or 6% may also be assessed on delinquent tax bills depending on the county and the amount of taxes owed. These penalties may only be assessed once during the tax year.

What is the name of the local official whom typically conducts tax lien sales in New Jersey?
Tax Collector.

When does the typical New Jersey municipality hold their annual tax lien sale?
The time of the tax lien sale varies by municipality. Many municipalities hold their sales between June and October. 

What are the registration requirements for the typical New Jersey tax lien sale?
Registration requirements vary by municipality.

What is the bidding type used at a typical New Jersey tax lien sale?
Most municipalities use the bid-down interest method at public tax lien auctions. If a tax lien certificate is bid down to 0% without a winning bidder, the bidding for the certificate will continue using premium bidding.

What forms of payment are generally accepted at a typical New Jersey tax lien sale?
The typical municipality accepts cash or certified funds.

What are the general terms of payment for the typical tax lien certificate purchased at a New Jersey tax sale?
The typical municipality requires full payment for the tax lien certificate on the day of the sale.

What is the redemption period for tax lien certificates in New Jersey?
The redemption period is two years and starts on the day of tax lien sale.

What is the maximum return (interest rate and/or flat penalty rates) investors earn while they hold the tax lien certificate?
The maximum interest rate that accrues on a tax lien certificate is 18% per annum. Depending on the municipality and the amount of the tax lien certificate, up to a 6% flat penalty may be assessed on a tax lien certificate per tax year. If the taxpayer redeems the tax lien certificate just prior to the end of the two-year redemption period, the maximum return would be 48% (36% simple interest + 12% flat penalty).

Is the interest rate applied only to the minimum bid amount for each property, or is this interest rate also assessed on the premium or "overbid" paid for the property during the auction?
The tax lien purchaser's "overbid" amount is returned, but it does not earn interest. An "overbid" only comes into play at a New Jersey tax sale if the parcel is bid down to 0% and then the bidding continues using premium bidding.

Are tax liens certificates offered "over-the-counter" in New Jersey?
No.

What is the name of the county official whom typically determines the values of properties on an annual basis?
Assessor.

For more information on the life cycle, requirements, and administering of tax liens in the state of New Jersey, refer to the New Jersey Statutes.

New Jersey Municipality Reference