NJ Tax Sale: What It Is, How It Works, and What Property Owners Can Do
If your property has been listed for a tax sale in New Jersey, it means property taxes have gone unpaid and the municipality is moving to recover the debt.
A tax sale is not the same as a sheriff’s sale. It does not immediately mean your home is being auctioned for ownership.
This page explains how tax sales work in New Jersey, what a tax lien certificate is, how long you have to redeem the property, and what options may still be available.
What Is a Tax Sale in New Jersey?
A tax sale in New Jersey occurs when a municipality sells a tax lien certificate due to unpaid property taxes, sewer charges, or other municipal debts.
Important distinction:
At a tax sale, the property itself is not immediately sold.
Instead, a tax lien certificate is sold to an investor.
The investor pays the municipality the amount owed. In exchange, the investor receives the right to collect the debt plus interest.
You still own your property after the tax sale.
How the NJ Tax Sale Process Works
The general process looks like this:
Property taxes become delinquent
The municipality sends notice
The property is scheduled for public tax sale
Investors bid on the tax lien certificate
The highest bidder wins the lien
The bidding is typically based on the interest rate the investor is willing to accept.
Each municipality in New Jersey conducts its own tax sales through the local tax collector’s office.
What Is a Tax Lien Certificate?
A tax lien certificate is a legal claim placed against a property for unpaid taxes.
When someone purchases the certificate:
They pay the delinquent taxes to the municipality
They earn interest on the amount owed
They gain the right to pursue foreclosure if the lien is not redeemed
The homeowner still holds title to the property.
How Long Do You Have to Pay After a Tax Sale?
In most cases, New Jersey property owners have a two-year redemption period after the tax lien certificate is sold.
During that time, you can:
Pay the original tax amount
Pay accumulated interest
Pay additional fees
Once paid, the lien is removed.
If the lien is not redeemed, the certificate holder may file a tax foreclosure lawsuit.
What Happens If You Do Not Redeem the Tax Lien?
If the redemption period passes and the lien remains unpaid, the certificate holder can initiate foreclosure proceedings.
At that point, the case moves through the court system and can eventually lead to loss of ownership.
This process is separate from a mortgage foreclosure, but the end result can be similar if no action is taken.
NJ Tax Sale vs. Sheriff’s Sale vs. Auction: What’s the Difference?
Tax Sale
• Triggered by unpaid property taxes
• A tax lien certificate is sold
• You still own the property after the sale
• You have a legal redemption period
Sheriff’s Sale
• Triggered by mortgage foreclosure
• Property ownership is auctioned
• Conducted by the county sheriff
• Happens after final court judgment
• Initiated by the homeowner
• Used as a selling strategy
• Property is marketed before bidding
• Owner may set a reserve price
• Sale terms are agreed to in advance
Sheriff’s sales and tax sales are different legal processes with different timelines, while an auction can be a voluntary selling method chosen by the homeowner.
Can You Sell Your House Before a Tax Sale in New Jersey?
Yes. If your property has been scheduled for tax sale but the sale has not yet occurred, you can still sell your house.
Before the tax sale takes place, you remain the legal owner of the property. That means you can choose to sell it and use the proceeds to pay the unpaid property taxes, interest, and any municipal charges.
Selling before the tax sale may allow you to:
• Pay off delinquent taxes
• Avoid additional interest and penalties
• Prevent a tax lien certificate from being sold
• Maintain control over the transaction
At closing, the outstanding tax balance would typically be paid directly to the municipality from the sale proceeds.
Once the tax sale happens and a tax lien certificate is issued, the situation changes. Acting before the scheduled sale date gives you the most flexibility.
Can You Sell a Property After a Tax Sale?
Yes.
Even after a tax lien certificate is sold, you can still sell your property as long as ownership has not transferred through tax foreclosure.
Many homeowners choose to sell before foreclosure proceedings begin in order to:
Pay off the tax lien
Avoid additional legal fees
Protect remaining equity
Resolve other liens
The key is resolving the lien at closing.
Can Multiple Liens Exist on One Property?
Yes.
It is possible for a property in New Jersey to have multiple liens:
- First mortgage lien
- Second mortgage lien
- Home Equity Line of Credit (HELOC) lien
- Tax lien certificate (municipal property taxes)
- IRS federal tax lien
- New Jersey state tax lien
- Municipal utility lien (water, sewer)
- Special assessment lien
- Mechanic’s lien (contractor or construction lien)
- HOA or condominium association lien
- Judgment lien (civil court judgment)
- Child support lien
- Business or commercial judgment lien
- UCC fixture filing (when equipment is attached to property)
Priority and payoff amounts must be addressed during a sale.
What Happens If the Property Has Both a Tax Lien and a Mortgage Foreclosure?
This is more complex.
A property can have both:
An unpaid mortgage
An unpaid tax lien
Tax liens generally have priority over mortgages in New Jersey.
In these situations, timing and payoff calculations become critical.
Frequently Asked Questions About NJ Tax Sales
How do I find out if my property is listed for tax sale?
Contact your local municipal tax collector’s office or check public tax sale listings.
Can someone take my house immediately after a tax sale?
No. You still own the property during the redemption period.
What interest rate do tax lien buyers earn in NJ?
Interest rates are determined during the bidding process and can vary.
Can I negotiate with the tax lien holder?
In some cases, yes — especially before foreclosure is filed.
Understanding Your Options
If your property is scheduled for tax sale in New Jersey, the most important step is understanding:
How much is owed
When the sale is scheduled
Whether a lien has already been sold
When the redemption period expires
The earlier you review your numbers, the more flexibility you may have.
If you would like clarity on your situation and what options may exist before a tax foreclosure begins, you can speak with our team for information and guidance — no pressure, just facts.
Before making any decisions, it may help to review your tax lien status and available options. We’re here to provide straightforward information so you can decide what makes sense.
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Disclaimer
The information provided on this page is for general informational purposes only and does not constitute legal, financial, or tax advice. Tax sale and tax lien procedures in New Jersey vary by municipality and individual circumstances. Laws, timelines, and redemption rights may change.
Garden State Cash Homes LLC is not a law firm and does not provide legal representation. You should consult with a qualified New Jersey attorney or financial professional for advice specific to your situation.
