When you buy a tax lien. Technically you are paying the taxes for the current owner. you will get paid back when ever the owner decides to pay you or the property exchanges ownership. You will get interest at a rate that you agree upon when you purchase. You will have the right to purchase all future tax liens and collect upto 18% interest.
should a bank or another lien holder foreclose you always get paid 1st.
After 2 years you have the right to foreclose and only the owner or the 1st lien holder have the right to pay you back. The owner can not borrow money to pay you.
I have a few tax liens available for sale that have past 2 years and are ready for foreclosure.
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I know NJ has a bad reputation when it comes to taxes, but there is not an exit tax. The sellers, if they are moving out of NJ, under certain circumstances have to pay a 2% withholding on the sale price. As mentioned in another answer, the state uses this to make sure you file a final tax return with the state of NJ. When you file your return, if you have overpaid, this amount is added to your other withholdings and you receive a refund. With home sale exemptions and current sale prices most people will not have capital gains taxes due. Your attorney and accountant are best equiped to give you a definitive answer. Being local, I can help you in your search, just contact me.... more
Hopefully there are standard comparable sales, if not unfortunately short sales have an impact if there are several sold at the same time. Remember it takes 3 comparables to get an appraisal formulated. If there is one short sale and 2 standard sales then the impact is less then 3 short sales and or reo's all sold in the 3 months that the comps are pulled.