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For more than two
hundred years, the United States
government has levied taxes against real estate.
At the county government level these taxes subsidize a number of
community services, including hospitals, public schools, law
enforcement, road construction & maintenance, parks, etc..
When taxes are not paid, the government lacks the operating capitol
needed for these programs.
As one means of generating lost income from delinquent taxpayers,
county governments offer Tax Sales at auction to the public. During
Tax Lien Sales, what is purchased at these auctions is not land,
rather a debt to be collected on. By purchasing the right to collect
past due taxes, a buyer is in essence loaning money to the property
owner to pay their taxes. During Tax Deed Sales however, the winning
bidder will own the deed and the land, having purchased it from the
county or authority performing the sale.
A Tax Lien, or Tax
Certificate Sale is a
public sale, usually by auction, with the right to collect on a
delinquent taxpayer's debt. This sale is held by the county,
generally once each year. What is purchased by the winning bidder is
not the deed to a property. The purchaser's money pays the delinquent
taxes to the County on behalf of the delinquent property owner. In
exchange, the purchaser is given first lien position on title, ahead
of mortgages, deeds of trust, and judgments, subordinate only to State
tax liens.
Under the terms of the
sale which may differ greatly from county to county, if the debt is
not repaid with interest (rate determined at the time of sale) within
a specified time period, the purchaser of the tax lien may foreclose
upon the property, and all junior (subordinate) liens are dissolved,
forgiven, or otherwise not the responsibility of the purchaser. If
you are interested in participating in a Tax Lien or Tax Certificate
Sale, contact the county for specific information and details both
about the sale and the properties.
A Tax Deed Sale is a public sale,
usually at auction, of the deed to the property of a delinquent
taxpayer. The Owner and all lien holders have been given ample time
and have received proper legal notification that the property will be
sold if due taxes are not satisfied. Different than a Tax Lien
Certificate Sale, the winning bidder purchases the deed to a piece of
property, becoming the new owner and obtaining all rights to the
property free and clear of liens, mortgages, deeds of trust, etc.
It is extremely
important to know and understand which kind of sale you are attending,
a tax deed or tax lien/certificate sale. Each has specific rules and
guidelines which must be followed promptly, and which can differ
greatly county to county. It is strongly recommended that anyone
interested in attending a tax sale be aware of the method and
timeliness required for payment and delivery of a property. |
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