@Casey Barry
That depends on the state and county. I pulled this from Howard County Maryland.
No. The successful bidder must pay for the taxes, interest, tax sale costs and any high-bid premium, by ACH Debit not later than 5:00 p.m. the day of the auction. The same bank account used to pay the registration deposit will automatically be debited for the total amount due for certificates purchased less the $1,000 registration deposit. The successful bidder must ensure the funds are available prior to 5:00 p.m.
High-bid premiums are additional funds deposited on any tax sale property for which the highest bid exceeds forty percent (40%) of the property’s full cash value. The high-bid premium is twenty percent (20%) of the amount that exceeds the forty percent cash value threshold. For example, if the full cash value is $100,000, the outstanding taxes due are $1,000 and the successful bid is $50,000, the bidder should expect to pay:
Taxes $1,000
High Bid Premium
Cash Value $100,000
40% Cash Value ($100,000 X .40) $ 40,000
Bid $ 50,000
Less 40% Cash Value $ 40,000
Total $ 10,000
20% Premium ($10,000 X .20) $ 2,000 $2,000
Total Payment Due $3,000
Under the example above, a total of $3,000 is due to the County by 5:00 p.m. the day of the auction. That is, $1,000 for the outstanding taxes, interest and costs, plus 20% of $10,000, the amount that exceeds forty percent of the full cash value or $2,000.
The high-bid premium is refundable without interest to the holder of the tax sale certificate or assignee upon redemption, or the plaintiff in an action to foreclose the right of redemption. The high-bid premium is non refundable if not redeemed, and no action to foreclose the right of redemption is filed within the two years of the date of the tax sale certificate.
No. The successful bidder will hold a tax lien against the property and be given a tax sale certificate. However, until redeemed, the lien will be considered the first priority financial obligation of the property.
The tax lien certificate is valid for two years from the date of the certificate.
The current interest rate paid by Howard County on tax sale property is eighteen percent (18%) annually. The interest amount will be calculated at a daily rate from the date of sale to the date of redemption.
The procedure for redemption of properties sold at tax sale is governed by state law set forth in Title 14, Subtitle 8 of the Tax-Property Article of the Maryland Annotated Code. The County does not provide legal advice to either the tax sale purchaser or the property owner on their respective rights under the law. Instead, you should either consult the state law or obtain independent legal advice on your rights and responsibilities under the law. The information in these FAQs is NOT intended to constitute legal advice and should not be relied upon in determining your rights and liabilities under governing law.
