How do I buy a home for unpaid property taxes in Florida?
Every state is different when it comes to how they handle unpaid property taxes. In Florida, the process is different than it may be in other places.
When a homeowner becomes delinquent, and their Property Taxes are not being paid by a mortgage lien holder, you can bid on a tax certificate at auction which is held at the courthouse. A tax sales in Florida, means you are NOT bidding on property but instead the interest you will accept after paying the delinquent taxes in full on behalf of the homeowner. The bidder willing to accept the lowest interest wins. This mean it could be as little as 1% for instance.
A Tax lien certificate is issued, but the owner of the property has 2 years to make good on the back taxes and interest before you can do anything with the paper you are holding against it.
This is known as the “Right of Redemption” which we have in this state. You must continue to pay property taxes for that property in order for the tax certificate to remain valid. The owner has the right to repay you, with interest, and reclaim the house at anytime during that window. If they default, and fail to exercise their “ right of redemption”, then you can proceed with the Clerk of Courts to obtain a tax deed.
This is a lengthy process, with no guarantees that you will own the property, which you have paid the taxes for unless, the owner of record fails to repay you. Investors, for many years looking for long term gains used this tactic successfully. When the Real Estate Market collapsed, tax sales became a little less popular as foreclosure increased. Banks looking to protect their investment, were paying taxes as part of the mortgage (funds were held in escrow for this purpose).