Property Tax Liens In Iowa
Property Tax Liens In Iowa pay the second highest interest rate of any tax lien state.
The 99 County Treasurers in the State of Iowa conduct their delinquent property tax sales.
The interest rate is 2% per month. 24% per annum with even a fraction of the month counting as a whole month.
Their redemption period is two years.
Iowa is a lien state. It has the second highest interest rate of all the tax lien states. And the interest is not bid down at the tax sale.
Iowa has an unusual bidding procedure where the percent of ownership in the property is bid down.
Each parcel is offered, for exactly the amount of taxes, interest, and costs due.
Whoever offers to pay that price is considered a winning bidder.
If more than one person is interested, the offer is made to bid down the percentage of interest in the property, to a minimum of 1% interest.
If the property eventually goes to a Treasurer’s Deed, you would receive a 1% undivided interest in the property.
Therefore, you would need to go to court to settle the issue of the 1% undivided interest.
If a number of bidders tie at a certain percentage of interest, (from 100 to 1%,) a random drawing process is used to determine the successful bidder.)
At the end of the sale, each bidder pays the total due for all parcels purchased.
If funds are not paid to treasurer, parcel may again be offered to other bidders.
The bidder willing to accept the least percentage of ownership in the property, should the lien not be redeemed, is the one who gets the lien.
Some counties use a random selection process instead of the bid down percent ownership method.
Most counties require registration in advance along with completion of a bidder registration form and W-9 form.
There usually is a nonrefundable fee for registration to bid at the sale. As in most other states, you are not allowed to bid on a property in which you have a vested interest.
Payment must be made at the conclusion of the sale. Some counties will accept personal or business checks (not from an IRA account) and some will accept credit card payments.
Also, foreigners who do not reside in the United States may purchase Iowa tax liens. They can not however purchase liens on agricultural land.
Subsequent tax payments may be made by the lien holder, and earn interest at the same rate as the tax lien certificate.
These payments need to be properly reported, however, or they will not be refunded at redemption.
In some counties, the lien purchaser is not automatically notified when a lien has been redeemed, and therefore is responsible for checking with the appropriate division to determine if redemption monies have been collected.
The tax lien purchaser may issue a “90- day notice of right of redemption” 1 year and 9 months after the sale (90 days before the redemption period ends).
If no action is taken 3 years after the sale, the treasurer will cancel the sale. Thus the lien purchaser will lose his/her investment to the county. In addition, many Iowa counties have tax sale information online.