Maryland Tax Liens

Maryland State Overview

Maryland utilizes a tax lien certificate system to collect delinquent property taxes. Tax sale dates are determined and vary by individual counties. Sales are published in the local newspaper and is circulated for 4 successive weeks. Registration rules vary per county, but most usually allow bidders to register on the day of the tax sale. Tax sales are conducted through an oral bid system. One advantage found in Maryland is the system used to collect payment from investors. The minimum bid amount which is all back taxes, penalties, and fees is due immediately, but the premium or overbid is only required when the investor files for foreclosure. This means if the property is redeemed, the investor never pays the overbid or surplus.

The rate of return in Maryland varies from 6% – 24% depending on the county. Many counties also have penalty rates included the return which positively affect the overall rate of return. Penalty rates are a flat percentage of the investment and do not accrue with time and dramatically change the overall rate of return in the investors favor.

Maryland uses the Premium Bid method. The starting or minimum bid includes all back taxes, penalties, interest, and administrative costs. The lien will then be bid up in price until a high bid has been established. The highest bidder will receive the tax lien certificate to the property.

Maryland has no specific redemption period which investors can begin the pursue foreclosure anytime after 6 months from the auction date. However, if a foreclosure proceeding are not filed within 2 years of the sales date the certificate becomes void.

• Tax Sale Type: Tax Lien Certificates (Sec. 14-820).
• Contact: Tax Collector. (Sec. 14-808).
• Interest Rate and/or Penalty Rate: 6% to 24% per annum. (Sec. 14-820).
• Bid Procedure: Premium bid / highest bid. (Sec. 14-817 (a) (2)).
• Redemption Period: 6 months. (Sec. 14-833).
• Law: Annotated Code of Maryland, Tax-Property Article, Title 14, Subtitle 8, Part III, “Tax Sales.”
• Property owner retains possession during redemption: According to (Sec. 14-830) the ‘owner of any property sold under the provisions of this subtitle shall have the right, during the period of redemption, to continue in possession of, and to exercise all rights of ownership over the property until the right of redemption has been finally foreclosed…‘
• Attaining a Tax Deed: According to (Sec. 14-833) the owner of a tax lien certificate can file for a tax deed six (6) months after the purchase of the tax lien but no later than two (2) years from the date the tax lien certificate was purchased.