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Introduction To Tax Lien Sales |
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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 fund a number of services,
including hospitals, public schools, law enforcement, road construction & maintenance,
parks, and playground equipment. When taxes are not paid, the government does not
have the operating capitol needed for these programs. |
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Description |
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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 at auction, of 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 type 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. For
further information, familiarize yourself with property tax law, consult a legal
attorney, and contact the government agency conducting the sale. |
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Disclaimer |
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This page has been developed to assist the understanding of Tax Sale transactions
in the United States. NETR and NETRonline strongly suggest familiarizing yourself
with property tax law, and seek the advice of a legal attorney before engaging in
any tax sale activity. Further, it is recommended that you contact the governing
body and organizer of any tax sale for specific information about registration,
qualification, acquisition, and delivery of services. NETR and NETRonline shall
incur no responsibility or liability whatsoever for the actions of the viewers of
its Web site, its contents, and the contents of those Web sites to which hyperlinks
have been established. |
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