What is a Tax Certificate versus a Tax Deed?

Did you know that you can buy property for as little as $3600? I’m not talking about wholesaling, I am talking about getting brand new title from the state to local real estate. How you ask? Tax Certificates and Tax Deeds.

Virtually all property in Florida is subject to property tax assessments. When the taxes assessed become delinquent, the local governments have been given the authority to try to limit losses to revenue by offering the public a chance to pay those taxes in exchange for a fixed rate of return. At these Tax Certificate auctions investors can get a 3 to 18% rate of return on paying for one or more years of delinquent taxes for any one assessed parcel. Much better than a standard savings account, right?

How does this become an opportunity to acquire property on the cheap? There are three ways.

1) If you hold a Tax Certificate for at least two years, you can petition the Tax Collector to hold a Tax Deed auction so that you can get all of your money back and/or have an opportunity to buy the property. You will have to pay the low application fee and redeem any other outstanding Tax Certificates, plus clerk fees for holding the sale. Once this is paid, the Clerk will schedule the sale, send certified notice to the prior owners and lienholders of record, and publish a notice of sale. If the property has not been redeemed by paying everything back that you just paid to the Tax Collector, then a sale will be held and the property will be sold to the highest bidder. 

2) You can show up at the Tax Deed sale and be the highest bidder

3) You can look up land available for taxes and walk up to the Clerk’s counter and literally satisfy the delinquency and receive a Tax Deed, with no competition. This is thanks to Florida Statute 197.502(7), which says:

 “On county-held or individually held certificates for which there are no bidders at the public sale and for which the certificateholder fails to timely pay costs of resale or fails to pay the amounts due for issuance of a tax deed within 30 days after the sale, the clerk shall enter the land on a list entitled “lands available for taxes” and shall immediately notify the county commission that the property is available. During the first 90 days after the property is placed on the list, the county may purchase the land for the opening bid or may waive its rights to purchase the property. Thereafter, any person, the county, or any other governmental unit may purchase the property from the clerk, without further notice or advertising, for the opening bid…”

Upon either of the three above occuring, you will be given a Tax Deed by the Clerk of Court. This Tax Deed is your title to the property. It is considered superior to private mortgages, private judgment liens, prior owners, homeowners and condominium association liens, IRS liens, and most other non-county/municipal liens. 

To learn more about  Property Tax Assessments, Tax Certificates, Tax Deeds, and Quiet Titles email me at Natalia@lcolawfl.com or make an appointment at legaladmin@lcolawfl.com at 813-480-2309.

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