Property Tax Liens In Florida

Property Tax Liens In Florida

Property Tax Liens In Florida are very competitive.

Since their property tax auctions are mostly conducted on the internet it allows an easy of entry unlike anywhere else. This is one reason Florida has the largest property tax lien auction in the United States.

How are the Florida tax auctions conducted?

Each Florida county begins their new annual property tax lien certificate auctions during the month of May. These auctions last until the first of June each year. All but the smallest counties in Florida it seems post their auctions on the internet. A few are still conducted in person.

To participate as an investor you must register. This registration involves you placing a deposit as you also enter the lowest amount of interest you wish to receive. The rates begin at a healthy 18% and drop in .25% increments down to an actual floor of .25%.

The lowest winning bidders receive a property tax lien certificate.

While the .25% floor seems a bit scary, as an investor you also be eligible to receive a 5% penalty payment even though your bid is below 5%. You only receive this when the property owner redeems or pays off your certificate.

For instance, assume you are the low and winning bidder on a vacant tract of land with an offer of $2,500 and an interest rate of 12%. The property owner redeems or pays your certificate off within 6 months.

Florida Tax LiensYou would receive your initial $2500.00 plus the 5% penalty or $125.00. Your return here would be an annualized 10% even though your bid was 12%.

Should the property owner not pay during this six month period you’ll receive your initial $2500.00 as well as the 5% penalty or $125.00. In addition, after month 6 you begin to receive your bid amount of 12% accruing every month following the auction. So at this point you forget about the 5% penalty and are earning $25.00 per month as long as it remains unpaid. Simple huh?

Can I receive the actual property in Florida?

Yes. Two years following April 1st in the year you purchased the delinquent property tax lien at auction you are eligible to apply for a tax deed. Your window here is two years and seven years. You must wait two years until your request and MUST file your request prior to 7 years. You’ll then pay ALL the outstanding taxes and begin the procedure to become the new owner.

At the time you file your request to become the new owner you begin to receive 18% annual interest on the entire amount plus any monies already due you. That’s the sweet part.

The downside is that few properties are deeded to the new under owner under this process in reality. Just be careful what you ask for. You could end up owning a less than desirable piece of property since most property owners would redeem their property should it have real value.

In Florida, we pay attention to homes we feel like will be redeemed since we have very little interest in actually owning the property. However, it does happen. But again, be careful what you wish for. What we have typically seen are investors becoming the owners of “money pits” that need considerable investment and attention.

Again, as with all states and local jurisdictions, do your homework. Become an expert in your home state first. Learn the ropes. Then expand if you desire a type of auction not offered in your state. But read and study the laws and procedures.