How a Property Tax Lien Works
Posted by admin on November 18, 2007 in Finance :: Tax
When a property owner fails to pay the taxes due on their property, the state places a tax lien on the property which is in it’s simplest form an IOU where the owner has to pay the taxes an some point within a pre-determined period.
If that property tax liens is sold to an investor, the property owners are then given 21 months to repay the certificate holder, who earns 2 percent interest a month. Failure to redeem the taxes allows the certificate holder to acquire title to the property.
If two buyers want the same property at the tax sale, the certificate goes to the bidder willing to accept the lowest interest rate. If nobody buys the taxes, the treasurer is required to buy the certificate on behalf of the county.
