How Tax Sales Work

Tax sales are a process by which a government entity, usually a county or municipality, sells properties that have unpaid property taxes. The sale is conducted to collect the delinquent taxes and to transfer ownership of the property to a new owner who can pay the taxes and take responsibility for the property.

The process typically begins when the government entity sends a notice to the property owner informing them that their taxes are delinquent and that they have a certain period of time, usually several months, to pay the taxes or the property will be sold at a tax sale. If the taxes are not paid, the property is then put up for sale at a public auction.

The auction is usually conducted by a government official, such as a county treasurer, and is open to the public. Anyone can bid on the property, but the winning bidder must pay the delinquent taxes as well as any additional costs associated with the sale, such as auction fees. The winning bidder also assumes ownership of the property subject to any outstanding mortgages, liens, or other claims.

It's important to note that in some states and municipalities, there are "redemption periods" where the previous owner still have the right to reclaim the property by paying the delinquent taxes, interest, and penalty within a certain period of time, usually from a few months to a year, after the sale. This period can vary from state to state, so it's important to check the local laws and regulations.

Tax sales can be a great opportunity for investors and other buyers to acquire properties at a discounted price. However, it's important to be aware of the risks involved. It's important to conduct due diligence on the property and check for any outstanding mortgages, liens or other claims. It's also important to be familiar with the local laws and regulations governing tax sales.

In conclusion, Tax sales are a process by which a government entity sells properties that have unpaid property taxes. It can be an opportunity to acquire properties at a discounted price, but it's important to be aware of the risks involved, conduct due diligence on the property, and check for any outstanding mortgages, liens or other claims before participating in a tax sale.