Tax Liens-Certificates;What are they?

Tax Sale Definitions

The following table provides a list of some of the common terms used in tax lien investing. Once you become familiar with the language used, the process is similar. However, every state and county handles the sales differently, so you must become familiar with local rules, regulations and statutes prior to going to an auction.

Tax Lien Certificate

A certificate that is usually sold at a public auction that represents the debt, penalties and interest owed on tax delinquent property. The actual physical certificate is nothing more than a piece of paper issued by the county to an investor. If the property owner pays off the tax debt, the certificate is considered redeemed and the investor surrenders it to the county. After the county receives the certificate, the investor is paid the amount of the tax lien certificate including the interest due on the certificate.

Depending on the state, these tax lien certificates offer interest rates ranging from as low as 8 percent to as high as 36 percent. Also, in most states, if the owner never pays off the certificate, then the buyer of the certificate (the investor) receives the property.

Tax Lien Properties

Properties offered at a tax sale that can purchased by investors. Tax sale properties are created when a property owner fails to pay their property taxes. After a period of time expires called the redemption period, investors, often for only the taxes, penalties and interest due, can purchase the property.

Many states provide lists of tax sale properties that can purchased at tax sale auctions or over the counter after the tax sale auction.

Tax Sales

A sale often sponsored by the government for the purposes of disposing of real property. County governments, to dispose of real estate that is in tax delinquency, conduct the most widely known tax sales. These sales, often called tax lien certificate sales or tax deed sales are conducted annually in most counties in the United States. Canada also conducts tax sales. However, in Canada, most sales are only tax deed sales.

At these sales, investors bid on either tax lien certificates that represent the debt due on the property, or tax deeds that represent actual ownership in the property. Tax lien certificates usually pay the investor an interest rate that can range from 8 to 50 percent. Tax deeds do not usually pay an interest rate, but after a period of time, called the redemption period, investors that buy tax deeds receive the entire property, often for only the penalties and interest due.

Tax Lien

A lien is placed on something or someone that is in tax delinquency. For example, if you own a home but do not pay your property taxes, the county will often place a lien on your property for the amount of taxes owed plus any penalties and interest. Before you can sell or transfer this property, you must pay this tax lien to clear the title. Also, the IRS may place a lien on a person and any property they own if they fail to pay federal income taxes

Counties, and in some states, municipalities, issue the most widely known tax liens to property owners that do not pay their property taxes. If these liens are not paid off in a specified period of time, then in some counties the debt is sold to investors using an instrument called a tax lien certificate. These certificates are sold at tax sale auctions.

Tax Lien Sales

Tax Lien Sales are conducted annually, or monthly, in most counties or municipalities to offer properties to investors that have delinquent property taxes. When a property owner does not pay their property taxes, the county places a high priority on getting their money. To get their money quickly, the county conducts a tax lien sale, where either a tax lien certificate or an actual tax deed is sold at public auction. The purpose of the tax lien auction or sale is to offer the debt or actual property to investors so the county can start receiving tax revenue from the property again.

Depending on the state, two types of tax sales are usually conducted, tax lien certificate sales or tax deed sales. Some states conduct both. Here is a list of states that conduct tax lien certificate sales and tax deed sales. As noted in the table, Canada also conducts tax sales.

Alabama Tax Sales
Alaska Tax Sales
Arizona Tax Sales
Arkansas Tax Sales
California Tax Sales
Colorado Tax Sales
Connecticut Tax Sales
Delaware Tax Sales
Florida Tax Sales
Georgia Tax Sales
Hawaii Tax Sales
Idaho Tax Sales
Illinois Tax Sales
Indiana Tax Sales
Iowa Tax Sales
Kansas Tax Sales
Kentucky Tax Sales
Louisiana Tax Sales
Maine Tax Sales
Maryland Tax Sales
Massachusetts Tax Sales
Michigan Tax Sales
Minnesota Tax Sales
Mississippi Tax Sales
Missouri Tax Sales
Montana Tax Sales
Nebraska Tax Sales
Nevada Tax Sales New Hampshire Tax Sales
New Jersey Tax Sales
New Mexico Tax Sales
New York Tax Sales
North Carolina Tax Sales
North Dakota Tax Sales
Ohio Tax Sales
Oklahoma Tax Sales
Oregon Tax Sales
Pennsylvania Tax Sales
Rhode Island Tax Sales
South Carolina Tax Sales
South Dakota Tax Sales
Tennessee Tax Sales
Texas Tax Sales
Utah Tax Sales
Vermont Tax Sales
Virginia Tax Sales
Washington Tax Sales
West Virginia Tax Sales
Wisconsin Tax Sales
Wyoming Tax Sales
Washington DC Tax Sales
Canada Tax Sales

*God Speed*
TLD Investments LLC


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