When homeowners fail to pay their property taxes, some tax jurisdictions choose to hold tax deed home sales to make back the money they are owed. Interested buyers can register to participate as a bidder on these homes in a tax deed auction.
Delinquent Tax Bill
Local tax jurisdictions determine how to handle past-due property taxes. Most areas start by imposing late fees or penalties. After a specified period of time with no payments, the tax collector can schedule the property to be sold through a tax deed sale. This process is also known as tax foreclosure.
Research Available Properties
Prior to the sale, the properties are advertised for a certain length of time, usually around three weeks, in local newspapers or on the county's website. Additionally, a list of the properties might be posted at the courthouse or tax collector's office. The ads generally include only the addresses and delinquent tax amount. You'll need to do your own research on any property you're interested in buying, but they are often sold "as is."
Register to Bid
Most locations require you to sign up to participate in the tax deed sale. You may have to submit a deposit, depending on the policies of the county. Contact your tax collector's office for more information.
Bidding and Payment
Typically, the tax collector sets the starting bid for each property at the amount of the back taxes, plus the fees owed by the homeowner. Most counties conduct the tax deed sale in an auction format, in which the property is sold to the highest bidder. Commonly, the full amount is due at the time of the sale, so you will need to come prepared with cash or a certified check.
After the sale is final, the tax collector must sign a deed that grants you ownership of the property. The deed should be recorded at the county clerk or register of deeds office, or else there is no formal record that you own the home. Depending on the volume of property transfers the county processes, this can take a few weeks to complete.
Video of the Day
- Foreclosure.com: Tax Deed Sales
- Rogue Investor: Tax Deed Sales Information by State
- Tax Policy Center: State and Local Tax Policy -- How Do Property Taxes Work?
- Martha O. Hayine, CPA Comptroller Orange County Florida: Tax Deed Sales
- California State Controller's Office: Public Auctions and Bidder Information