Quote from @Nadine McAuliffe:
Quote from @Will Sifert:
Quote from @Harrison Silverstein:
Quote from @Will Sifert:
Quote from @Harrison Silverstein:
Quote from @Will Sifert:
Quote from @Harrison Silverstein:
I was looking into tax liens and even tax overages a number of years ago. One thing that worries me right now is the possibility of NYC to abolish tax sales. If that succeeds, more states would probably soon follow. (Ultimately what pushed me into note investing as well)
Before diving deep into it, the landscape could be changing quite a bit in the near future. It's already a competitive field, that may get even tighter.
Abolish property taxes????????? and replace it with what, a 75% income tax or .30 cent sales tax ?? No state will ever do away with property tax. There would be NO money for schools, fire, police, roads, parks etc etc etc etc etc etc etc etc.
Hey sir, nowhere did I talk about abolishing property taxes. I encourage you to reread.
They're abolishing the tax sale. @Nadine McAuliffe summarized perfectly.
If they abolish the tax sale then how do they plan on getting people to pay their taxes? How does the county collect taxes if the home owner doesn't pay it and there are no investors to pay it?? WHO PAYS IT ??????? You do realize a tax LIEN sale does not "sell" the property just the lien. There is a redemption period and foreclosure process for the very very few who never repay the past taxes owed.
The county could literally just pursue the same things, and not sell the tax as a lien. Just to name one.
“Same things” what does that mean??
So the county sounds out tax bills, people don’t pay. They send out several more notices a d charge late fees and penalties. People don’t pay. The county needs the money to pay for schools, police, fire departments, roads etc etc etc.
The people still do not pay. It goes to tax sale, the investors pay, the county gets it money all public services are funded.
Remove tax sales from the process. People don’t pay, investors don’t pay.
WHO PAYS?
your response is the county “can purse the same things”??
Like what? The county can’t buy the tax liens and pay the taxes. Taking it out of one pocket and putting it in another doesn’t solve the problem of not collecting property tax revenue they need to run everything.
"The same things" meaning, the same remedies for delinquent taxes as the investor would whilst owning the lien. I.e. The homeowner pays eventually or the county forecloses on the property and sells the home. (Which they have the power to do now, they just opt for the easy option which is, currently, sell it to an investor to do it on their behalf as the lien holder because the county just wants their taxes paid and that's it).
The county only creates liens because they have the ABILITY to sell it. If they abolish the tax sale, counties would only pursue foreclosure. Which, funnily enough, they don't want to do themselves because it is expensive and time consuming.
I hope that answers a few things for you. There are a tonne of resources available online that delve deeper. Personally, I am a note investor and I just pay off the lien (if applicable) for properties I own the paper against. If you're interested in learning more, Naked Notes is a podcast I'd highly recommend. They have some episodes on tax liens too.
He said states might "do away with tax sales". You do understand that there are two types of tax sales, tax deeds and tax liens. What you described is how a tax deed sale works. About half of the states are tax deed states the rest are tax lien. Counties would never do away with tax sales.
Take my state for example, it is a tax lien state but what doesn't sell goes back to the county. The county will then go through the quiet title process and auction the property off to the highest bidder. The county keeps all of the proceeds from the sale, nothing goes back to the original homeowner. All tax lien states pretty much work the same way, most call what doesn't sell as being "struck off". That eventually gets auctioned off or sold as a deed sale. Most states don't have "overages" that amount above what is owed that goes back to the home owner.
Tax sales will never go away. Each state has their nuisances on how they want to conduct it and if they want to keep the extra money or not from a deed sale. Just like each state has different procedures on how they keep the difference from the bidders of tax lien sales. For example, AZ is a lien state. The interest rate is bid down from 16% to 0%. If I bid 5% and win the lien the homeowner still gets charged 16%, the county keeps 11% and 5% goes to me. Another example, CO is a lien state. There is a premium bid system where you bid above the amount owed. So if the lien is for $1000 and I bid $1500 whether the home owner redeems or not, the county gets their taxes plus keeps that extra $500. I don't get it back either. Some states make a fortune off of the premium bidding. Other states charge a registration fee $50 - $100 to bid and then let you register as many entities as you want. Iowa for example, one company will register thousands of entities to bid at a counties tax sale. The county will make hundreds of thousands just in the registration fees.
Believe me the counties that want to make a fortune off of their tax sales are doing it.There will always be tax sales.
