Getting Your Home Back After a New Jersey Property Tax Sale

Depending on the circumstances, you normally have two years or six months following a tax lien sale in New Jersey to redeem your house.

If you do not pay your property taxes on time, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages. When taxes are not paid, the taxing authority will either sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another way to get title to the house) or sell the property itself in a tax sale. In certain areas, however, no auction is made; instead, the taxation body enforces its lien by acquiring ownership to the residence. The taxation body is then required by state law to dispose of the property, typically by selling it. Before conducting a sale, the taxation authority in some countries utilizes a foreclosure procedure.

Once a tax lien is placed on your house in New Jersey, the collector (on behalf of the municipality) may sell the property at a public auction, subject to your right of redemption (see below). New Jersey Statute Ann. 54:5-31). Following the transaction, the purchaser obtains a “certificate of sale.” New Jersey Statute Ann. 54:5-46. If no one buys the house at the auction, the certificate of sale is given to the municipality.

In New Jersey, there is a redemption period after the sale of a tax lien.

The duration of the redemption period in New Jersey is determined by whether a third party purchased the lien during the sale and if the residence is empty.

If Someone Purchased the Tax Lien, the Redemption Period

The successful bidder must wait two years after the tax lien auction before filing a foreclosure lawsuit in court. 54:5-86 (N.J. Stat. Ann.). So, if a third party purchased the lien during the sale, you have at least two years following the sale to pay off the tax liability.

If No One Purchased the Lien, the Redemption Period

If no one bids on the lien during the tax lien auction, the municipality must wait six months before beginning foreclosure proceedings. 54:5-86 (N.J. Stat. Ann.).

If You Move Out, You Have a Redemption Period

If you’ve abandoned (that is, permanently moved out of) the house and the property fits certain state law standards, the foreclosure process may begin immediately after the tax lien sale. 54:5-86 (N.J. Stat. Ann.).

When the Redeeming Right Expires

You have until the court issues a judgment in the foreclosure to redeem. (See N.J. Stat. Ann. 54:5-86, 54:5-87).

How to Reduce Your Property Taxes

Even though you will have a redemption time after a New Jersey tax sale, it is usually advisable to take action before your taxes become late in order to make them more inexpensive.

You may, for example, find out whether you qualify for a property tax abatement or seek a revision in the property’s assessment if you believe the assessed value isn’t indicative of the fair market value.