Property Tax Delinquency in South Jersey: How It Works
New Jersey has some of the highest property tax rates in the nation — and South Jersey is no exception. When taxes go unpaid, NJ municipalities sell tax lien certificates to private investors at annual tax sales under N.J. Stat. Ann. § 54:5. These investors pay the delinquent taxes and earn up to 18% annual interest on the outstanding balance until the lien is redeemed.
The longer a lien goes unredeemed, the faster the interest compounds — and after 2 years, the lienholder can file a lien foreclosure action, potentially claiming the property. This is separate from mortgage foreclosure and can happen even on properties with no mortgage.
South Jersey Property Tax Rates
| County / City | Approx. Effective Rate | Annual Tax on $180K Home |
|---|---|---|
| Atlantic City | ~4.8% | ~$8,640 |
| Bridgeton (Cumberland) | ~4.1% | ~$7,380 |
| Salem City | ~4.6% | ~$8,280 |
| Millville (Cumberland) | ~3.4% | ~$6,120 |
| Cherry Hill (Camden) | ~2.1% | ~$3,780 |
| Deptford (Gloucester) | ~2.5% | ~$4,500 |
How We Handle Tax Liens at Closing
You don't need to pay off your tax liens before we close — and you don't need to call the municipality or lien holders yourself. Here's exactly what happens:
- Title search identifies all liens. Our title company pulls a complete list of all outstanding tax liens, certificates, and delinquent balances on the property — including third-party tax certificates and accrued interest.
- Payoff amounts are calculated. The title company gets current payoff figures from the municipality and each lien certificate holder — including all accrued interest.
- Liens paid from sale proceeds at closing. All outstanding liens are paid in full from the sale proceeds before any funds are distributed to you. Clear title transfers to us; your tax obligations are fully discharged.
- Remaining proceeds wire to you. Whatever is left after mortgage payoff and lien satisfaction goes directly to your bank account on closing day.
Tax Lien Foreclosure vs. Mortgage Foreclosure
Many South Jersey homeowners don't realize that tax lien holders can foreclose separately from their mortgage lender. After holding a tax lien certificate for 2 years, a certificate holder can file a lien foreclosure action in Superior Court — a process that, if it runs to completion, can extinguish both the mortgage and the homeowner's equity.
If you have a lien certificate that is approaching its 2-year anniversary, contact us immediately. We can often close before a lien foreclosure action reaches completion, preserving your equity.
🏛️ NJ Tax Lien Law Reference
NJ Tax Sale Certificate Law: N.J. Stat. Ann. § 54:5 — governs municipal tax sales and certificate redemption
Maximum interest rate: 18% per year on delinquent tax certificates
Lien foreclosure right: Certificate holders can foreclose after 2 years
NJ Division of Taxation: njtaxation.org · (609) 292-6400
NJ Property Tax System: How Delinquency Becomes a Lien
New Jersey property taxes are levied quarterly — February 1, May 1, August 1, and November 1. When a payment is missed, the municipality charges interest: 8% per annum on the first $1,500 of delinquency, and 18% per annum above $1,500 (N.J. Stat. Ann. § 54:4-67). After the end of the tax year, the municipality holds an annual tax sale to sell tax lien certificates on all delinquent properties.
A third-party investor who purchases a tax lien certificate at the municipal tax sale pays the delinquent taxes to the municipality and then holds a lien on the property. The investor earns the statutory interest rate — up to 18% per annum — until the lien is redeemed (paid off). After two years, the certificate holder can file to foreclose on the lien — a separate legal proceeding from mortgage foreclosure.
The Municipal Tax Sale Process in South Jersey
- ✓Annual tax sale: Each South Jersey municipality holds at least one annual tax sale to sell certificates on delinquent properties
- ✓Premium bidding: Investors bid on the interest rate — the winning bidder accepts the lowest interest rate (0–18%). Most competitive markets see bids near 0%, with the investor hoping to foreclose
- ✓Certificate recording: The tax sale certificate is recorded with the county clerk — it appears in a title search as a lien on the property
- ✓Redemption right: The property owner can redeem the certificate at any time before foreclosure by paying the full amount plus accrued interest
- ✓Two-year minimum before foreclosure: The certificate holder must wait at least 2 years before filing a lien foreclosure action
- ✓Municipal tax lien foreclosure: Proceeds through NJ Superior Court — similar to mortgage foreclosure but faster in some counties
South Jersey Municipal Tax Sale Contacts
| Resource | Address | Phone | Website |
|---|---|---|---|
| Cherry Hill Tax Collector | 820 Mercer St, Cherry Hill | (856) 488-7870 | cherryhill-nj.com |
| Camden City Tax Collector | 520 Market St, Camden | (856) 757-7003 | ci.camden.nj.us |
| Bridgeton City Tax Collector | 181 E. Commerce St, Bridgeton | (856) 455-3230 | bridgetonnj.gov |
| Millville City Tax Collector | PO Box 609, Millville | (856) 825-7000 | millvillenj.gov |
| Salem City Tax Collector | 229 Market St, Salem | (856) 935-0372 | cityofsalemnj.com |
| Atlantic City Tax Collector | 1301 Bacharach Blvd, Atlantic City | (609) 347-5328 | cityofatlanticcity.org |
| Woodbury City Tax Collector | 33 Delaware St, Woodbury | (856) 845-1300 | woodbury-nj.com |
What Happens to Your Mortgage When You Have Tax Liens
If you have both a mortgage and a tax lien on your South Jersey property, both must be addressed at closing. Here is the priority order in NJ:
- ✓Property taxes are senior to all mortgages in New Jersey — even if the mortgage was recorded years before the tax became delinquent
- ✓All outstanding tax lien certificates must be redeemed before clear title can transfer
- ✓Your mortgage lender must be paid in full from sale proceeds before you receive anything
- ✓If total liens exceed sale price — you may need lender approval for a short sale, or other resolution strategies
If a tax lien certificate on your South Jersey property is approaching its two-year anniversary, the certificate holder may be preparing to file foreclosure. A cash sale — which can close in 7–14 days — can prevent lien foreclosure from progressing. Call us immediately at (856) 226-4289 if you know your lien is aged.
NJ Tax and Financial Resources for Property Owners
| Resource | Address | Phone | Website |
|---|---|---|---|
| NJ Division of Taxation | 3 John Fitch Way, Trenton | (609) 292-6400 | njtaxation.org |
| NJ Homestead Benefit Program | PO Box 900, Trenton | (888) 238-1233 | njtaxation.org |
| Camden County Board of Taxation | 512 Lakeland Rd, Blackwood | (856) 225-5238 | camdencounty.com |
| Cumberland County Board of Taxation | 60 W. Broad St, Bridgeton | (856) 453-2123 | co.cumberland.nj.us |
| Atlantic County Board of Taxation | 5901 Main St, Mays Landing | (609) 343-2248 | aclink.org |
| NJ Housing and Mortgage Finance Agency | 637 S. Clinton Ave, Trenton | (800) 654-6873 | njhousing.gov |
