Tax Lien Certificates and Tax Deed Sales are a way for a municipal government to collect taxes on properties when the owners have failed to pay their taxes. When a St. Petersburg homeowner defaults on their property taxes, Pinellas County forecloses on the property. Tax defaulted properties are different from mortgage default properties because the owner defaults on their mortgage payments in the latter situation and the lender forecloses on the property. With a tax defaulted property, the government is foreclosing.
Tax Defaulted Properties Yield High Rates of Return
Municipalities such as Pinellas County rely on tax dollars to run their government services including schools, police, fire and to pay other first responders and provide their city services. Without those tax dollars, cities are unable to provide basis services to their residents. To entice investors to invest in tax defaulted properties, Pinellas County and other Florida municipalities offer these properties either for sale at tax deed sales for pennies on the dollar, or they offer investors the opportunity to purchase tax lien certificates so they can receive high interest rates on their investment.
Tax lien certificates can yield a return on investments as high 18% for St. Petersburg tax defaulted properties. Tax lien certificates are safe investments because they are guaranteed by the government who pays investors back on their investment at a high rate of return. If the owner never redeems the property, investors have the opportunity to acquire properties for substantially reduced prices. When you invest in St. Petersburg tax defaulted properties, you know you are going to receive a high rate of return on your investment.
Pinellas County Tax Deed Sales
To acquire a St. Petersburg tax defaulted property in Pinellas County, you can bid at a tax deed sale auction. At a tax deed sale auction, you are bidding for title and ownership to the property. The property is offered to the highest bidder. If your bid is selected, you will be given a deed to the property.
The Pinellas County Clerk’s office conducts the sale in accordance with Florida Statutes, Chapter 197 and the Florida Administrative Code, Chapter 12D-13. To find out more information about online tax deed sales, you can visit the Pinellas county website at www.pinellas.realtaxdeed.com and check the auction calendar for upcoming scheduled sale times and days. Please note that many times the sales are postponed or cancelled so you should keep checking for changes.
Tax deed sales are also published in the local newspaper. Properties are sold as is, and you must do our own due diligence, researching title, liens on the property, zoning, recent sales, etc. You are responsible for paying off any liens on the property. You may also want to speak with a Florida real estate attorney regarding Florida tax deed auction or tax lien certificate sales or laws that may affect the use of the property if your tax deed auction bid is selected. You can also obtain additional information from the Pinellas Tax Deed Office by calling them at (727) 464-3424.
Tax Lien Certificate Sale
In Florida, real estate property taxes are considered delinquent on April 1st each year. Delinquent properties are advertised in a local newspaper for once a week for three consecutive weeks prior to a tax certificate sale. By law, the tax lien certificate sale must be held in Pinellas County on or before Jun 1st each year if the owner has not paid their delinquent property taxes, accrued interest and fees. A tax certificate is considered a first lien against the property for the unpaid property taxes and has a priority over a mortgage lien.
Investors can purchase the certificates by paying off the delinquent tax debt. The sale is conducted online at bidpinellas.com on June 1st of each year. Bidders can go to the website and find all the information necessary in order to make a bid. The sale is conducted with bidders bidding down the starting interest rate of 18% which is paid on the certificate. The bid will be awarded to the investor/buyer who bids the lowest interest rate and agrees to pay off the delinquent taxes, fees and interest costs associated with the property.
When there are no bidders, the certificate is then issue to the County at 18% annual interest. In order to redeem the property, the owner must pay the county tax collector the amount of the delinquent taxes plus the accrued interest and fees. The county tax collector in turn reimburses the tax lien certificate holder, if there is one, for the costs of obtaining the tax lien certificate.
So if you bid 12% interest on the tax lien certificate, you would receive 12% interest per year on your investment until the former owner redeems the property. If the owner does not redeem the property after two years, a tax lien holder can file a tax deed application. The property will be sold at a public tax deed sale conducted by the Clerk of the County.
Other States Which Pay High Rates of Return
The following is a list of other states that also pay high yields on tax lien certificates
- Illinois -36 percent per year. Liens with early redemption 216% per year.
- Indiana-15 percent per year. Liens with early redemption 120% per year.
- Iowa- 24% per year.
- Georgia – 20% return per year. If redeemed within one year, 240% annual rate.
- Texas –Redemption fee of 25% of the aggregate cost of the property when redeemed within at least 6 months. If the property is redeemed within a month, look for an incredible 300% return.
- Delaware –Redemption fee of 15%. If the property is redeemed within a month, expect an unbelievable return of 180%.
Acquiring St. Petersburg tax defaulted properties is a great way to accumulate a high rate of return on your investment, and they are not affected by real estate cycles. So if you are looking for a safe investment, tax defaulted properties are one of the best investments you can make.