Tax Lien Properties AuctionTax Lien Properties

What are tax lien properties

Tax lien properties for sale are those which have been foreclosed because of unpaid taxes. This is irrespective of the tax be they income taxes, property taxes or any other tax levied on the property. Tax lien properties in Florida for example are a very common type of sale and the original holder is forbidden from bidding on his or her property. This is in accordance to the tax rules in many states in the US. Buying tax lien properties can be taken by force using a police warrant, especially if it touches on Federal and State taxes.

The law state s that unless another date is specifically fixed by law, the tax lien imposed by section 6321 shall arise from the time the assessment is made and will continue until the liability amount is so assessed is satisfied.

Tax lien properties – How the property is auctioned

When the government wants to collect unpaid taxes from delinquent taxpayers, it can carry out a tax auction. This is where tax lien properties are sold by a court ordered auction. Depending on the state and the nature of sales, the auction of tax lien properties in California can take the form of auction for tax deed sales or tax lien certificates.

Where government tax lien properties will be sold by an auction for the tax deed, the property is sold to satisfy the existing unpaid taxes. The auction of a tax lien certificate will comprise of selling the certificate to claim the sum total of taxes owed together with any administrative charges and interest on the amount owed.

If sale of tax lien properties in Arizona are sold by way of purchase of a tax lien certificate, the buyer is required to make payment against the required property taxes that the holder of the tax lien properties has not paid. In turn, the defaulting taxpayer will be required to pay back the amount of lien. This will be inclusive of interest charges at a rate of 16% to 18 % to be paid to the buyer of the tax lien certificate. This gives the buyer of the certificate option of either a higher interest rate if the repayment if made or the possibility of the deed to the tax lien properties of the tax defaulting party.

Tax lien properties auction and implication

This auction is overseen by a court appointed referee. At the start of the auction, he or she announces the terms of sale and the required deposit to be made at the auction. A person participating in the auction is required to pay 10% in form of a certified check payable to the referee.

When buying tax lien properties in Maryland, they are sold under “AS IS, WHERE IS, WITH ALL FAULTS” presumption. This means that you are not allowed to inspect real estate and you are to bid for it accounting this uncertainty. Therefore you should investigate the tax lien properties as best as you can.
The implication of having your real estate auctioned is that your credit rating plummets. This will make it very difficult to obtain the credit in future. When dealing with this issue of tax lien properties it is better to seek professional help so as to be able to go about it easily.

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