Delinquent Property Taxes in New Jersey: The Auction Bids the Rate to Zero, Then Starts Bidding Cash
Reviewed by DocDraft Legal Team · New Jersey · Last updated October 21, 2026
A New Jersey tax sale opens as a contest over an interest rate and can turn into a contest over cash. Delinquent property taxes are taxes an owner did not pay by the date the law fixes, after which interest is added and the taxing body can force a sale to collect them. What the municipality sells is not the house but a tax sale certificate, a lien, struck off in fee subject to redemption to whoever takes the lowest rate of interest, never above 18 percent per year (N.J. Rev. Stat. 54:5-32). Once a bidder will accept under 1 percent, or nothing, that same section lets them bid a premium over and above the taxes due the municipality, and the parcel goes to the highest premium. The premium is held by the collector and returned to the purchaser if and when redemption is made (N.J. Rev. Stat. 54:5-33). Taxes go delinquent after February 1, May 1, August 1 and November 1 (N.J. Rev. Stat. 54:4-66), and the municipality fixes interest under a ceiling of 8 percent a year on the first 1,500 dollars and 18 percent above it (N.J. Rev. Stat. 54:4-67). No fixed redemption deadline runs here. You may redeem at any time until the right to redeem is cut off (N.J. Rev. Stat. 54:5-54), and the holder cannot start a Superior Court action to cut it off until two years from the date of sale, or six months where the municipality bought the certificate (N.J. Rev. Stat. 54:5-86). Attorney review is available through DocDraft.
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How long do I have to redeem after a New Jersey tax sale certificate is sold?
There is no fixed period. The owner, heirs, a mortgagee or an occupant may redeem at any time until the right to redeem has been cut off (N.J. Rev. Stat. 54:5-54). The holder may file to cut it off two years after the date of sale, or six months where the municipality bought the certificate (N.J. Rev. Stat. 54:5-86).
How much interest does a New Jersey tax sale certificate charge to redeem?
Whatever rate was bid at the auction. The sale goes to the buyer who will take the lowest rate of interest, and in no case above 18 percent per year (N.J. Rev. Stat. 54:5-32). Redemption is the sum paid at the sale with interest at the rate of redemption for which the property was sold (N.J. Rev. Stat. 54:5-58).
When do New Jersey property taxes become delinquent each year?
Four times. Installments are payable February 1, May 1, August 1 and November 1, and the taxes become delinquent after those dates (N.J. Rev. Stat. 54:4-66). A municipality may resolve that no interest is charged on an installment paid within the tenth calendar day after it became payable (N.J. Rev. Stat. 54:4-67).
Who do I pay to redeem a New Jersey tax sale certificate?
The municipal tax collector, or the collector of delinquent taxes where the land sits (N.J. Rev. Stat. 54:5-54). All redemptions must go through the tax collector's office unless a court order or federal bankruptcy law says otherwise, and a lienholder who knowingly takes payment elsewhere forfeits the certificate (N.J. Rev. Stat. 54:5-54.1).
New Jersey delinquent property tax rules at a glance
New Jersey gives this job to the municipality rather than the county, so the desk that can stop it is the municipal tax collector's. Delinquent property taxes are taxes an owner failed to pay by the statutory date, after which the municipality adds interest and can sell a lien on the property to collect. The distinctive part is the auction itself. Bidding drives the redemption rate down from an 18 percent ceiling, and once a bidder will take under 1 percent or nothing, the same section turns the contest into a cash premium paid to the municipality (N.J. Rev. Stat. 54:5-32). Where nobody else bids, the parcel is struck off to the municipality at 18 percent (N.J. Rev. Stat. 54:5-34). After that no countdown runs. Redemption stays open until a Superior Court judgment bars it (N.J. Rev. Stat. 54:5-86, 54:5-87).
A Vineland two family where the rate hits zero and the premium does not count against the owner
Six thousand four hundred dollars of unpaid taxes sit on a two family off Landis Avenue in Vineland, so the City lists the parcel and holds its tax sale. Bidding takes the redemption rate from the 18 percent ceiling to zero, then the contest moves to cash and the certificate goes for a premium paid to the City (N.J. Rev. Stat. 54:5-32). That premium never reaches the owner's bill. The collector holds it and returns it to the purchaser if and when redemption is made (N.J. Rev. Stat. 54:5-33). What the owner owes is the sum paid at the sale at the bid rate (N.J. Rev. Stat. 54:5-58), a 4 percent additional sum because the certificate exceeds 5,000 dollars (N.J. Rev. Stat. 54:5-61), and later taxes the holder paid with interest (N.J. Rev. Stat. 54:5-60). Two years after the date of sale the holder may file (N.J. Rev. Stat. 54:5-86).
Relevant Laws
N.J. Rev. Stat. 54:4-66 (when the four installments are payable and go delinquent)
Provides that taxes for municipalities on the calendar fiscal year are payable in installments on February 1, May 1, August 1 and November 1, after which dates if unpaid the taxes become delinquent and remain delinquent until all unpaid taxes and later liens, together with interest, are fully paid, and that from the delinquency dates the taxpayer and the property are subject to the prescribed interest and penalties.
N.J. Rev. Stat. 54:4-67 (the interest ceiling and the year end penalty)
Lets the governing body fix the rate of interest for nonpayment, provides that the rate so fixed shall not exceed 8 percent per annum on the first 1,500 dollars of the delinquency and 18 percent per annum on any amount in excess of 1,500 dollars calculated from the date the tax was payable to actual payment, permits a resolution charging no interest where an installment is paid within the tenth calendar day after it became payable, and allows a year end penalty on a delinquency over 10,000 dollars that shall not exceed 6 percent of the delinquency. The municipality sets the actual figures by resolution.
N.J. Rev. Stat. 54:5-19 (standard and accelerated tax sales, and the installment agreement that keeps a parcel out of the sale)
Gives a municipality authority to conduct both standard and accelerated tax sales, requires a standard sale in the fiscal year following the close of the year in which the taxes were in arrears, requires an accelerated sale where taxes remain in arrears on the 11th day of the eleventh month of the fiscal year with the sale conducted and completed no earlier than that year's last month, and lets the municipality by resolution omit from the sale liens on which regular, equal monthly installment payments are being made under an agreement with the collector that clears all delinquent taxes and municipal liens in not more than five years.
N.J. Rev. Stat. 54:5-19.1 (electronic tax lien sales)
Allows a municipality to satisfy the requirements of the tax sale law electronically through a nationally recognized electronic municipal tax lien service, including electronic publication of sale notices, electronic auctions and electronic payment, under rules of the Director of the Division of Local Government Services, while requiring that notices to a property owner or lienholder continue to be made by mail.
N.J. Rev. Stat. 54:5-26 (posting and publication of the notice of tax sale)
Requires copies of the notice of a tax sale to be set up in five of the most public places in the municipality and published in a newspaper once in each of the four calendar weeks preceding the calendar week containing the day appointed for the sale, allows notice by regular or certified mail to the owner in lieu of any two publications at a cost of up to 25 dollars per notice added to the cost of sale, and provides that failure of the owner to receive a properly mailed notice is not grounds to void the sale.
N.J. Rev. Stat. 54:5-29 (the collector must take payment at any time before the sale)
Provides that at any time before sale the collector shall receive payment of the amount due on any property together with the interest and costs incurred up to the time of payment, and that where a taxpayer pays the full amount advertised plus any interest on other delinquencies before the sale, the collector posts the receipts to interest, then the oldest delinquencies, costs and penalties, which is cause for the property to be removed from the sale.
N.J. Rev. Stat. 54:5-32 (the bid down rate, the 18 percent ceiling, and the switch to a cash premium)
Provides that the sale shall be made in fee to such person as will purchase the property subject to redemption at the lowest rate of interest, but in no case in excess of 18 percent per annum, and that if at the sale a person offers to purchase subject to redemption at a rate of interest less than 1 percent, or at no interest, that person may in lieu of any rate of interest to redeem offer a premium over and above the amount of taxes, assessments or other charges due the municipality, with the property struck off and sold to the bidder offering the highest premium.
N.J. Rev. Stat. 54:5-33 (what happens to the premium, and the five year limit on it)
Requires payment for the sale before the conclusion of the sale or a resale, and provides that any premium payment shall be held by the collector and returned to the purchaser of the fee if and when redemption is made, that if redemption is not made within five years from the date of sale the premium is turned over to the municipal treasurer and becomes part of the funds of the municipality, and that the five year limit is extended for each day a foreclosure is precluded by the owner's bankruptcy filing. As amended in 2024 it also governs refund of the premium where a sheriff's judicial sale or Internet auction is held.
N.J. Rev. Stat. 54:5-34 (no other purchaser, so the municipality takes it at 18 percent)
Provides that the officer making the sale shall strike off and sell to the municipality in fee for redemption any parcel purchased under a successful bid made pursuant to a resolution of the governing body, or at 18 percent any parcel for which there shall be no other purchaser, and that the municipality then has the same remedies and rights as other purchasers, including the right to bar or foreclose the right of redemption.
N.J. Rev. Stat. 54:5-46 (the certificate of sale and what it must state)
Requires the officer holding the sale to deliver to the purchaser a certificate of sale under hand and seal, acknowledged as a conveyance of land, setting out the date of sale, the amount paid by the purchaser, the description of the land, the name of the owner, the items of the several municipal liens or charges with interest and costs, the rate of redemption for which the parcel was sold, the date to which liens are included, and the time when the right to redeem will expire.
N.J. Rev. Stat. 54:5-54 and 54:5-54.1 (who may redeem, until when, and through whose office)
Section 54:5-54 provides that the owner, the owner's heirs, the holder of any prior outstanding tax lien certificate, a mortgagee or an occupant may redeem at any time until the right to redeem has been cut off, by paying the collector for the use of the purchaser, and requires the collector to supply any party entitled to redeem two redemption calculations within a calendar year at no cost, with a municipality able by ordinance to charge up to 50 dollars for each later calculation requested in writing. Section 54:5-54.1 requires all redemptions to be made through the tax collector's office unless authorized by court order or federal bankruptcy law, and makes a lienholder who knowingly causes a redemption outside that office forfeit the certificate to the redeeming party.
N.J. Rev. Stat. 54:5-58 and 54:5-60 (the amount required to redeem)
Section 54:5-58 provides that the amount required to redeem is the sum paid at the sale with interest from the date of sale at the rate of redemption for which the property was sold, and that after 10 days from the date of sale, or after the certificate issues within that period, the figure is that amount plus the purchaser's expenses and subsequent municipal liens. Section 54:5-60 provides that where the certificate is not held by the municipality the redemption figure includes all sums for subsequent taxes, municipal liens and charges, with interest and costs, actually paid by the holder, together with interest at the rate or rates chargeable by the municipality, provided the holder has filed an affidavit of payment with the collecting officer.
N.J. Rev. Stat. 54:5-61 (the additional 2, 4 and 6 percent sums on redemption)
Entitles the holder of the tax title to fees and expenses for ascertaining the persons interested, not exceeding twelve dollars in all, plus sums actually paid to record the certificate and, on compliance with 54:5-62, necessary newspaper advertising and service of notices, and sets additional sums on redemption of 2 percent of the certificate amount where it exceeds 200 dollars, 4 percent where it exceeds 5,000 dollars, and 6 percent where it exceeds 10,000 dollars.
N.J. Rev. Stat. 54:5-86 (the six month and two year waits, and how long the right to redeem lasts)
Lets a municipality that is the purchaser of a tax sale certificate institute an action to foreclose the right of redemption at any time after six months from the date of sale, lets all other persons who did not acquire the certificate from a municipality institute the action at any time after two years from the date of sale of the certificate, provides that on instituting the action the right to redeem shall exist and continue until barred by the judgment of the Superior Court, and lets a holder of a certificate on property meeting the statutory definition of abandoned property file at any time.
N.J. Rev. Stat. 54:5-87 (the judgment that bars redemption, and the owner's written demand to preserve equity)
Gives the Superior Court power to bar the right of redemption, bar claims to surplus equity and vest an absolute and indefeasible estate of inheritance in fee simple in the purchaser, bars any application to reopen the judgment after three months and then only for lack of jurisdiction or fraud, and, as amended in 2024, gives the owner or the owner's heirs the right to demand by written request to the Superior Court before the date final judgment is entered that the foreclosure proceed through a sheriff's judicial sale in the manner of a mortgage foreclosure or a sheriff's Internet auction, with surplus funds deposited with the clerk of the Superior Court and that process the exclusive method of claiming them.
N.J. Rev. Stat. 54:5-97.1 (the 30 day notice of intention to foreclose)
Allows a plaintiff other than a municipality no search fee, counsel fee or certified mailing fee in the foreclosure of a tax lien unless, before filing the complaint, it gave at least 30 days' written notice by certified mail to the parties entitled to redeem whose interests appear of record at the tax sale, stating the amount necessary to redeem as of the date of the notice and advising the owner of the right to request a sheriff's judicial sale or Internet auction to preserve any equity, with a copy filed with the municipal tax collector.
N.J. Rev. Stat. 54:5-98 (where redemption is made after filing, and the fees added to the redemption figure)
Provides that after the complaint is filed redemption is made in that cause only where notice of the suit has been filed with the tax collector, lets the court order redemption to the municipal tax collector at the official office during business hours or to the county clerk where the collector is a part time official with no regular municipal office, and lists what is added to the redemption figure, including a search fee up to 350 dollars and attorney's fees up to 150 dollars before filing, and attorney's fees of 2,500 dollars plus itemized expenses once the action is filed.
N.J. Rev. Stat. 54:5-98.1 and 54:5-98.2 (the bold face notice of the right to demand a sale, and the holder's lien on the surplus)
Section 54:5-98.1 requires a certificate holder to provide the owner, with the summons and complaint, information prominently displayed in bold face type stating the right to demand in writing to the Superior Court before final judgment that the foreclosure proceed to a sheriff's judicial sale or Internet auction, and entitles the holder to a first lien on surplus funds of 10 percent, not to exceed 5,000 dollars. Section 54:5-98.2 requires a municipality's own notice of foreclosure, served and published, to state that right conspicuously in boldface type and to say the owner has until entry of final judgment to file the written request.
P.L.2024, c.39 (the enacted chapter law that added the surplus route, approved July 10, 2024)
The chapter law as enacted. It amends 54:5-33, 54:5-86, 54:5-87, 54:5-97.1, 54:5-98, 54:5-104.59 and 54:5-104.64 and adds 54:5-98.1 and 54:5-98.2, builds the owner's written demand for a sheriff's judicial sale or Internet auction into both the tax sale law and the In Rem Tax Foreclosure Act, defines surplus funds, requires service of notice of the right in actions already pending on enactment, and provides that the act applies to any tax lien for which the right of redemption had not been foreclosed as of its effective date and has no effect where final judgment was entered before then.
New Jersey Division of Local Government Services: Elements of Tax Sales in New Jersey
A Department of Community Affairs page on how the statutory scheme runs in practice, including that every municipality with delinquent property taxes or municipal charges must hold at least one tax sale per year, that property taxes are a continuous lien and are due in four installments, that what is sold at the tax sale is a tax sale certificate and not title to the property, and that bidders bid down the interest rate and then bid a premium. The posted copy is dated 2011, so the statutes above govern every figure on this page.
Regional Variances
New Jersey delinquent property tax rules at a glance
Sale mechanism
Tax lien, then a court foreclosure. The municipality sells a tax sale certificate in fee subject to redemption, not the property (N.J. Rev. Stat. 54:5-32, 54:5-46), and the holder must foreclose the right of redemption in the Superior Court before title vests (N.J. Rev. Stat. 54:5-86, 54:5-87). A municipality may run the sale electronically, including an electronic auction (N.J. Rev. Stat. 54:5-19.1).
Delinquency dates
Four installments, payable February 1, May 1, August 1 and November 1, delinquent after those dates (N.J. Rev. Stat. 54:4-66). A municipality may resolve that no interest is charged where an installment is paid within the tenth calendar day following the date it became payable (N.J. Rev. Stat. 54:4-67).
Interest before any sale
Set by the governing body under a statutory ceiling, so the figure is municipal, not statewide. The rate fixed may not exceed 8 percent per year on the first 1,500 dollars of the delinquency and 18 percent per year on any amount above that, run from the date the tax was payable to actual payment (N.J. Rev. Stat. 54:4-67). A year end penalty capped at 6 percent may be fixed for a delinquency over 10,000 dollars.
Time before sale
A standard tax sale covers taxes in arrears at the close of a fiscal year and is held the following fiscal year. An accelerated tax sale reaches taxes still in arrears on the 11th day of the eleventh month of the fiscal year and must be conducted and completed no earlier than that year's last month (N.J. Rev. Stat. 54:5-19). Municipal liens are to be enforced within one year of that date (N.J. Rev. Stat. 54:5-37).
Redemption period and clock
No fixed period. Redemption runs at any time until the right to redeem has been cut off (N.J. Rev. Stat. 54:5-54), and once the action is instituted it continues until barred by the judgment of the Superior Court (N.J. Rev. Stat. 54:5-86). The date of sale starts the holder's wait to file, two years for a private purchaser and six months for a municipality, and a certificate on statutorily abandoned property can be filed on at any time.
Redeemer's charge
A bid down rate, not a fixed return. Interest runs at the rate of redemption for which the property was sold (N.J. Rev. Stat. 54:5-58), set at auction by whoever will take the lowest rate under an 18 percent per year ceiling, and it can be bid to zero (N.J. Rev. Stat. 54:5-32). The full 18 percent applies where there was no other purchaser and the parcel was struck off to the municipality (N.J. Rev. Stat. 54:5-34). Flat additional sums apply on top: 2 percent of the certificate amount above 200 dollars, 4 percent above 5,000 dollars, 6 percent above 10,000 dollars (N.J. Rev. Stat. 54:5-61).
Other redemption costs
Subsequent taxes and municipal liens the holder paid, with interest at the rate chargeable by the municipality, on a filed affidavit (N.J. Rev. Stat. 54:5-60); search fees capped at twelve dollars plus recording, advertising and service costs (N.J. Rev. Stat. 54:5-61); before filing, a search fee up to 350 dollars, certified mailing costs and attorney's fees up to 150 dollars; after filing, attorney's fees of 2,500 dollars plus itemized expenses (N.J. Rev. Stat. 54:5-98). The premium bid at the sale is not in the figure; the collector returns it to the purchaser on redemption (N.J. Rev. Stat. 54:5-33).
Notice to the owner
Notices set up in five of the most public places in the municipality and published once in each of the four calendar weeks before the week of the sale, with mail notice in lieu of two publications (N.J. Rev. Stat. 54:5-26). Before a private holder forecloses, at least 30 days' certified mail notice stating the redemption amount and the right to request a sheriff's sale (N.J. Rev. Stat. 54:5-97.1), and bold face notice of that right with the summons and complaint (N.J. Rev. Stat. 54:5-98.1, 54:5-98.2).
Where to redeem
The municipal tax collector, or the collector of delinquent taxes of the municipality where the land lies (N.J. Rev. Stat. 54:5-54). All redemptions must be made through the tax collector's office unless a court order or federal bankruptcy law authorizes otherwise (N.J. Rev. Stat. 54:5-54.1). After a complaint is filed the court may direct redemption to the collector's office, or to the county clerk where the collector is part time with no regular office (N.J. Rev. Stat. 54:5-98).
Surplus proceeds
Claimable, but opt in and time barred. The owner or the owner's heirs must demand in writing to the Superior Court before final judgment is entered that the foreclosure proceed through a sheriff's judicial sale or Internet auction; absent that demand there is no claim against the holder for equity (N.J. Rev. Stat. 54:5-87). Surplus is deposited with the clerk of the Superior Court after the holder is paid, the holder takes a first lien of 10 percent capped at 5,000 dollars (N.J. Rev. Stat. 54:5-98.1), and statutorily abandoned property is excluded. Added by P.L.2024, c.39, approved July 10, 2024.
Payment plan
A municipality may by resolution omit from the sale liens on which regular, equal monthly installment payments are being made under an agreement between the collector and the owner, provided the agreement clears all delinquent taxes, assessments and municipal liens held by the municipality in not more than five years and current taxes are kept paid; an installment or new tax unpaid for thirty days voids it (N.J. Rev. Stat. 54:5-19). Before the sale the collector must accept payment of the amount due (N.J. Rev. Stat. 54:5-29).
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