Tax Lien Certificates Guide

Archive for December, 2009

The simplest way to understand Tax Lien Certificates is to realize all real estate is taxed by the county or municipality. Taxes are collected to provide many different benefits to citizens. Every property owner is assessed for property tax one or more times each year. Tax districts & municipalities receive their revenue from property taxes.

In many states, if the property owner does not pay the property taxes the county or municipality will accrue the taxes and penalties for many years. Ultimately, if the property owner does not pay the taxes, the county or municipality will sell or auction the property at a tax sale or auction.

Counties issue a tax lien which in many states are sold at an auction, These certificates allow the counties and municipalities to collect the tax revenue they need to run the government for each year ? rather than wait for the property to be auctioned to collect the taxes due.

In other words, the county or municipality sells a tax lien certificate that is nothing more than a certificate that shows the taxes due on ?X? property.

The objective in selling the certificates is to allow an investor (rather than the property owner) to pay the property tax on ?X? property. This benefits the county with immediate revenue and benefits the investor with a low-risk certificate that has a high-yield interest rate ? which could be from 10% all the way to 50%.

Tax Lien Foreclosure is the formal term for the process in which counties or municipalities collect their money. The sales for delinquent property taxes occur at every level of government, from the county to hospital districts, to water districts and to transportation districts. All these government agencies have taxing authority and the taxperson?s ultimate remedy is a foreclosure.

Tax Lien Foreclosure is the formal term for the process in which counties or municipalities collect their money.

The sales for delinquent property taxes occur at every level of govern