When you don’t pay your New Jersey property taxes, the municipality may sell the tax lien that it has on your home to a third party. If you don’t pay off the lien, you can eventually lose your home to a tax foreclosure. On the up side, New Jersey law gives you a good amount of time to come up with the money needed to prevent the tax foreclosure from taking place – so long as you don’t abandon the home.
Unpaid property taxes in New Jersey become a lien on your home. The municipality can then sell that lien at a public auction, typically to a third party who gets a certificate of sale.
What happens after the municipality sells the lien. If you don’t pay off the tax debt plus interest (which is called “redeeming” the home) within a certain time frame after the sale, the person or entity that bought the lien can foreclose on your home by filing a lawsuit in court.
What happens if no one buys the lien at the sale. If no one bids on the home at the sale, the municipality gets the certificate of sale and can eventually foreclose to get ownership of your property. (For details on the tax lien sale process in New Jersey, see What Happens If I Don't Pay Property Taxes in New Jersey.)
In New Jersey, the amount of time you get to redeem depends on whether a third party bought the lien at the sale and whether the home is vacant.
How long you get to redeem if someone bought the lien. You get at least two years after the sale to pay off the tax debt if a third party bought the lien at the sale. This is because the winning bidder must wait two years after the tax lien sale before filing a complaint with the court to foreclose (N.J. Stat. Ann. § 54:5-86).
How long you get to redeem if no one bought the lien. If no one bid on the lien at the tax lien sale, the municipality has to wait for six months before starting the foreclosure (N.J. Stat. Ann. § 54:5-86).
The foreclosure can start right away if you leave the home. If you abandon (that is, permanently move out of) the home, the foreclosure can start immediately after the tax lien sale (N.J. Stat. Ann. § 54:5-86).
When your right to redeem ends. You can redeem at any time up until the court enters a judgment in the foreclosure (N.J. Stat. Ann. § § 54:5-54, 54:5-86). After the court enters the judgment, there is a three-month period when the court might reopen the judgment and allow you to redeem under very limited circumstances (N.J. Stat. Ann. § 54:5-87). (If you want to redeem your home after the foreclosure starts or after the court enters judgment, you should speak to an attorney who can inform you about your options.)
While you’ll get some time to redeem your home before losing it to a tax foreclosure, it is usually a good idea to take steps to make your taxes affordable before you fall delinquent. For example, you could:
To review the statutes that discuss tax lien sales and redeeming your home after a tax lien sale in New Jersey, go to go to Title 54, § § 54:5-1 through 54:5-137 of the New Jersey Statutes.