Red Bank is introducing an online tax sale, a move that borough officials say will reduce costs and lower interest rates for those with delinquent bills while opening the town to a greater number of investments.
Approved by the Director of the Division of Local Government Services, it’s a pilot program and the first sale of its kind in the state. The new method should simplify a process that’s long been restricted to those knowledgeable and, of course, close enough to participate in local tax sales.
Tax sales are held annually – sometimes by quarter depending on the municipality – to help towns clear unpaid taxes off their rolls. Tax sales allow investors to buy up debt, be it on property taxes or utilities, and charge debtors interest on top of their bill. Liens are placed on properties and the debt, plus interest, is paid back or else steps can be taken by the debt-holder to take control of the properties in question. Tax sales are usually the final step after several notices of unpaid bills.
Interest rates are arrived at through a bidding process, with the lowest interest rate winning the tax sale.
Councilman Mike DuPont said the online sale should attract much more attention than tax sales held locally – Red Bank CFO Colleen Lapp said the borough’s tax sale last year only brought in about 15 people – which, ideally, would lower the interest rates on owed debt. What an online sale does, DuPont said, is open up local tax sales to the entire country rather than a few local investors.
The first online tax sale will be held Monday, Oct. 29 at 8:30 a.m. online at redbanktaxsale.com. Beginning Oct. 1, interested bidders can log on to the site and see listed properties. After registering, participants will have access to the New Jersey Tax Certificate Process, bidder rules, webinars and mock sales where they can practice bidding.