Tax Lien Records

Tax Deed Auction

A tax deed auction is a public auction usually conducted annually, where properties whose taxes have not been paid are put up for sale. Property owners are required to pay property tax to the local government within certain prescribed time periods, failing which the taxes are considered to be delinquent. The government then issues notices to the concerned property owners regarding their unpaid tax dues and the consequences they would have to face if they fail to pay the taxes within a certain date. After this time period expires without any response from the property owner, the government then proceeds to take action in either one of two ways. In some states, the law dictates that the property be sold in a public auction whereas in other states, it mandates that a tax lien certificate be sold first as an interim measure to offer more time for the owner to pay back the taxes.

The tax lien is a sum of all the unpaid taxes on the property, penalties imposed if any, the advertising costs accrued and any other fees involved in implement the tax lien procedures. The government recovers this entire amount from interested investors by selling them what are known as tax lien certificates. The amount that investors pay towards the purchase of these tax lien certificates is primarily the method that county governments use to recoup any outstanding tax amounts on properties under their jurisdiction. The government now pays an interest to the investor on the amount of money that they have invested in the tax lien certificates. The government also guarantees that the tax lien certificates would be paid for within a certain time period. This feature makes investments on tax lien certificates extremely safe and rewarding.

If and when the property owner fails to pay back his dues before the deadline, the certificate holder has the right to request the government to go ahead with the sale of the property in a public auction. Such a sale is referred to as a tax deed sale. Since the minimum bid starts with the amount of unpaid taxes, the accrued interest and other costs involved in putting the property up for sale, tax deed sales are an excellent opportunity for purchasing properties at a fraction of their actual market value.

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