The District of Columbia has a tax lien auction each year around the month of July. Any liens left from the auction will be placed in an ongoing discount auction.
Tax sales in Massachusetts done via “taking” sales. The local tax collector oversees the tax sales. Tax deeds sold in Massachusetts are purchased with a six month right of redemption. A penalty rate of 16% is applied to the redemption of all tax deeds.
In Vermont, tax collector’s sell tax lien certificates to the winning bidders at the delinquent property tax sales. The winning bidder is the one willing to pay the most for the tax lien. Depending on when the homeowner redeems he or she will be charged a 12% penalty. Upon the expiration of the redemption period, which is 2 years, the investor may apply for the tax deed. The tax lien will remain in full force and effect for up to 15 years.
In South Dakota, tax collector’s sell tax lien certificates to the winning bidders at the delinquent property tax sales. The winning bidder is the one willing to pay the most for the tax lien. Depending on where the property is located, the homeowner has approximately three (3) or four (4) years from the date the tax lien certificate was purchased to redeem. Depending on when the homeowner redeems he or she will be charged a 10% penalty. Upon the expiration of the redemption period the investor may apply for the tax deed.
Tax Sale Type: Tax Lien Certificate. (Sec. 10-23-18).
Contact: The County Treasurer. (Sec. 10-22-21).
Interest Rate and/or Penalty Rate: 10% per annum. (Sec. 10-23-8).
Bid Procedure: Bid down interest rate. (Sec. 10-23-8).
Redemption Period: Depending on where the property is located, three (3) or four (4) years (see “Additional Notes”). (Sec. 10-25-1).
Law: South Dakota Codified Laws, Title 10, Chapter 22 – “Collection Of Delinquent Property Taxes “, Title 10, Chapter 23 – “Sale of Real Property for Taxes and Assessments”, Title 10, Chapter 24 – “Redemption from Tax Sales” and Title 10, Chapter 25 – “Tax Deeds”.
Additional Notes:
Important According to (Sec. 10-23-28.1 New Window) ‘No Sale of tax certificates after July 1, 2006. Notwithstanding the provisions of chapters 10-23, 10-24, and 10-25, no county may sell any tax certificate after July 1, 2006, unless the board of county commissioners adopts a resolution waiving the provisions of this section that prohibit the sale of tax certificates. The county shall be the holder of any tax certificate issued by the county after July 1, 2006, unless the board of county commissioners adopts a resolution waiving the provisions of this section that prohibit the sale of tax certificates. The county treasurer shall continue to serve notice on the owner of record of the real property, publish notice, and attend to the other administrative provisions imposed by chapter 10-23, 10-24, and 10-25. Nothing in this section affects the holder of any existing tax certificate, the method in which the tax certificate is redeemed, or the sale of real property for taxes or assessments’. Some counties, have adopted a resolution waving the provisions of (Sec. 10-23-28.1 New Window). Such is the case in Pennington County where third-party investors can still purchase tax lien certificates.
In West Virginia the Sheriff is responsible for the collection of back taxes. The Sheriff prepares a list of delinquent properties in the first two weeks of September. His responsibilities include conducting and overseeing the tax lien auction. All of the tax liens are sold to the highest bidder. All counties will publish their list in their local newspapers three to six weeks prior to the date of the auction. The starting bid begins with the back taxes, any penalties, and administrative fees included. The property owner has up to 5:00 pm the day before the sale to pay off all of his taxes, penalties, and fees. The highest bidder gets the tax lien certificate, but the amount of money that anyone bids past the amount that is owed does not accrue interest. So anything that is overbid does not accrue interest for the investor.
Texas is a popular state because as they say “everything is bigger in Texas.” Texas offers one of the highest, if not the highest, interest rates available of all 50 states. After the first year you may make 50% penalty interest on your investment. Many of the counties in Texas use law firms to handle their back taxes and sale of redeemable tax deeds. You can find the main law firms that handle Texas here:
Perdue Brandon Fielder Collins & Mott LLP, Attorneys at Law www.pbfcm.com
Linebarger Goggan Blair & Sampson, LLP, Attorneys at Law www.publicans.com
McCreary, Veselka, Bragg & Allen, P.C., Attorneys at Law www.mvbalaw.com
For any county that does not use a law firm, check with the tax collector department for that county.
Tax sales in Hawaii are very similar to those conducted in a tax lien state. The county tax collector or treasurer oversees the tax sales. Tax deeds sold in Hawaii are purchased with a one year right of redemption. Tax deeds must be recorded with the county within 60 days of the sale to maintain a 12 month redemption period. If the tax deed is recorded later than 60 days from the auction date the redemption period is one year from the recorded date. A penalty rate of 12% is applied to the redemption of all tax deeds. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the 12 month period the tax collector or tax collector’s assistant shall execute the process of terminating redemption rights.
Hawaii has a 12% penalty rate for the first year. The penalty rate is paid on the amount paid by the purchaser, plus an additional fee for recording the tax deed. If a deed is not recorded within 60 days of the sale, the interest shall not be added for the extended redemption period.
Hawaii uses the Premium Bid method. The starting bid will include all back taxes, penalties, interest, and administrative costs. The deed will be bid up in price until a high bid has been established. The investor bidding the highest amount will receive the deed to the property.
In Hawaii there are two main areas to invest in, the west and the east. According to local facts, the west area has more property that can be accessed.
There are very few tax deed properties available in this state, but when there are auctions, they usually take place in June, November, and December.
Louisiana is classified as a Redemption Deed State. The municipal or parish tax collector oversees the sale which is an oral public auction. Tax deeds are sold with a 3 year right of redemption. Investors receive a rate of return of 1% per month, or 12% annually. Investors also receive a penalty rate of 5% upon redemption, making the annual rate a return of 17%. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the 36 month period, the right to redeem the property will be forfeited.
Tax deeds are awarded to the investor who bids down to the lowest percentage of ownership in the property. Louisiana”s State statutes are based on a French law called the Napoleonic Code instead of the English common law used in almost every other state. Because of this difference, it can make the statutes difficult to understand and often confusing.
There is a 12% annual rate of return or a 1% per month return in Louisiana. The state also mandates a flat penalty rate of 5% due to the deed holder upon property redemption. The overall rate of return an investor receives is determined by the redemption date. A property redeemed after 1 month would yield an interest rate of 72% (1% + 5% penalty X 12 months), while a property that redeemed after 35 months would yield a return of 13.7%.
Louisiana uses a bid down ownership method. Investors compete by bidding down how much property ownership backs the redemption deed or tax lien. Using this system requires a lien holder to file a court action to prosecute the foreclosure in order to sell the property. The proceeds would then be divided based on the percentage of the ownership held.
Tax Sale Type: Hybrid Tax Deed (Sec. 47:2183).
Contact: (Sec. 47:2182).
Interest Rate and/or Penalty Rate: 12% per annum plus 5% penalty. (Sec 47:2224.).
Redemption Period: Three (3) years. (Sec. 47:2183 (a)).
Law: Louisiana Constitution, Title 47, Subtitle III, Chapter 5, “Tax Sales and Redemptions.”
Record the Tax Deed. According to (Sec. 47:2183 (A)) the purchaser must file the deed ‘for record in the conveyance office in the parish in which the property is situated.‘ to begin the countdown of home owners three (3) year right to redeem.
Obtaining a writ of possession. Louisiana is unique in that the purchaser of the hybrid tax deed can request immediate possession of the property before the expiration of the home owners three (3) year right to redeem has expired.
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