When do Real Estate Taxes Become Delinquent?

Real estate taxes become delinquent on April 1st each year.

Example: 2013 taxes became delinquent.  April 1, 2014.  At that time 3% is added to the gross amount.

Are Delinquent Taxes Advertised?

A list of all real property with delinquent taxes is advertised in a local newspaper once a week for three consecutive weeks immediately preceding the tax certificate sale.  The advertisement is in parcel ID order.  The advertisement also specifies the place, date, and time of the Tax Certificate Sale.  Due to payments being received after the list is first prepared for publication, the newspaper will list more items than will be sold.  The amount advertised is the amount due for the purchase of each certificate.

What is a Tax Certificate?

On or before June 1st of the same year the taxes become delinquent, the Tax Collector holds a public online sale of tax certificates – www.lienhub.com on all parcels on which taxes have not been paid.  The cost to purchase a certificate is listed beside each parcel in the delinquent advertisement.  This cost includes gross tax, interest, advertising cost, and the cost of the Tax Certificate Sale.

A tax certificate represents a first priority tax lien on real property; it does not convey title to the land.  Purchasing a tax certificate does not entitle the certificate buyer to enter the property, nor contact or harass the owner in any manner.  Tax certificates are investments and NOT a deed to the property.

According to Florida Law, FS. 197.432 (13), The holder of a tax certificate may not directly, through an agent, or otherwise initiate contact with the owner of the property upon which he or she holds a tax certificate to encourage or demand payment until 2 years after April 1 of the year of issuance of the tax certificate. FS. 197.432 (14), Any holder of a tax certificate who, prior to the date 2 years after April 1 of the year of issuance of the tax certificate, initiates, or whose agent initiates, contact with the property owner upon which he or she holds a certificate encouraging or demanding payment may be barred by the tax collector from bidding a tax certificate sale.

Unfair or deceptive contact by the holder of a tax certificate to a property owner to obtain payment is an unfair and deceptive trade practice, as referred in s.501.204(1), regardless of whether the tax certificate is redeemed. Such unfair or deceptive contact is actionable under s. 501.2075-501.211. If the property owner later redeems the certificate in reliance on the deceptive or unfair practice, the unfair or deceptive contact is actionable under applicable laws prohibiting fraud.

What is a Tax Certificate Sale?

The Tax Certificate Sale is conducted pursuant to DOR Rules & Regulations and the Guidelines of the Tax Collectors’ Association.  The tax certificate sale is NOT a sale of land, but the sale of a lien against the property.  Purchasing a tax certificate does NOT entitle the certificate buyer to enter the property, nor contact or harass the owner in any manner.

On the advertised day and time, the Tax Collector shall commence the sale of tax certificates on those lands on which taxes have not been paid.  Bidding begins at 18% and the certificate is sold to the person bidding the LOWEST annual interest rate.

How are Tax Certificates “REDEEMED”?

In order to clear the property of the tax certificate lien, the property owner must pay the amount of the tax certificate plus the rate of interest at which the certificate was sold, calculated from the month of the sale to the month of redemption.  When a tax certificate is redeemed, on or after June 1st, a $6.25 redemption fee is also charged.  After redemption, the certificate holder receives the amount invested plus interest and is responsible for noting that the certificate is “paid” on his/her certified listing.  Certificates bid at 0% interest DO NOT accrue interest.  The payor’s remittance releases the tax lien, and the certificate holder has no further claim on the property.  Interest earned is taxable and must be reported to the IRS.  Each January, an IRS 1099-INT form is sent to each certificate holder for interest earnings in the previous year  (Chapter 197.472(1) Florida Statutes).

What Happens if The Certificate is NOT Redeemed?

If the certificate is not redeemed within two years from the date the tax became delinquent, the certificate holder may apply for a tax deed, and bring the land to sale at public auction.  Example: 2000 taxes became delinquent on April 1, 2001; therefore, a tax deed application may be made after April 1, 2003.  A certificate holder who wishes to apply for a tax deed must redeem all other certificates and pay other fees as mandated by state law.  Certificate holders must notify the Tax Collector’s Office in writing to request a tax deed application.

FAQ About Tax Deeds:

Tax Deed sales are held throughout the year.  Information regarding upcoming sales and sales lists can be obtained from the Clerk’s website www.osceolaclerk.com. Tax Deed sales are held online through the Clerk of Courts website above. To call direct 407-742-3500.