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New Jersey cities and towns sell tax liens on delinquent properties. A lienholder can file a foreclosure lawsuit after two years. But if the government holds a lien, it can file after six months.
Buying Liens The interest rate starts at 18%. However, if there is more than one person interested in the same parcel, they will start bidding down the interest rate.
What is sold is a tax sale certificate, a lien on the property. Tax sale certificates can earn interest of up to 18 per cent, depending on the winning percentage bid at the auction. At the auction, bidders bid down the interest rate that will be paid by the owner for continuing interest on the certificate amount.
Tax lien certificates are a safe, secure, and predictable investment. The tax lien interest rate by state varies. Depending on the state, the rate could be 16%, 18%, 24%, even 36%. In some states, the rate even varies by county.
New Jersey is a tax lien state, and New Jersey tax lien certificates pay a rate of 18% per annum. The auctions are a down bidding process. So the bidding starts at 18 and goes down. When you purchase a tax lien certificate, you are paying someone else's property taxes.