NJ Tax Liens Accrued Interest

Hey guys. I am fairly new to the tax lien market. For anyone investing in NJ tax liens, I wanted to ask a question based on your understanding of your NJ tax liens and the accrued interest you have received.

The question is: once acquiring a NJ tax lien and upon redemption, do you receive the full 2 years (NJ redemption period) accrued interest or simply the number of days the lienholder held the tax lien until the lien was redeemed?

I heard two NJ investors give me two very different answers and I don't think the accrual methods differ from town to town.

Thanks in advance for any guidance.

From what I understand ( and Im also pretty new to this.) The %'s, redemption period and if its accrued intrest or not differs from state to state. The only thing that is diffrent in the state is how the sale is set up. ( registration, bidding, so on.) And thats county to county. I hope this helps...

Sorry about the last post. I just got done reading that from one county to the next can change the %'s but that doesnt happen very often. Sorry about that.

I'm a NJ tax lien investor since 2002 and I'll try to answer your question for you. You acrew interest on your lien until it is redeemed. The interest is per annum and is calculated daily on the certificate amount.

Also were you aware that you can also pay the subsequent taxes in NJ and have them added to your lien. You get the maximum interest on your subs, which is 18% if the delinquent amount is $1500 or more. For delinquecies less than $1500 you get 8% on your subs until the delinquent amount is $1500 (this includes the certificate amount, subsequent taxes, and any prior liens) and then you receive 18% on anything after that.

And there is a redemption penalty that is also added when the lien is redeemed. The penalty is 2-6% on the certificate amount depending on the amount of the lien.

Hope this helps
[addsig]

In NJ, the "bidding" is on the rate of interest ... not the amount of the lien. Bidding begins at 18%, and descends until the rate of zero is reached... then the premium bidding begins.....

If you have to ask "what is premium bidding" you need to attend a couple of muni tax lien sales to get the lay of the land.

Thank you everyone for your feedback.

Is the 2-6% penalty added to the original lien or subsequent taxes or both?

Your local muni tax collector will be very happy to explain the process, and perhaps share any updated materials with you. I've heard many communties may soon "outsource" the duty of tax collection to third parties.... and themselves gobble up the tax lien certs.

I haven't heard anything about this and hope NJ doesn't look for another opportunity to take something away from the individual investor.