Alabama: Lien – Currently the maximum interest rate being offered to all Alabama tax lien certificate investors is 12% with a three year right of redemption. The counties use a Premium Bid method. Bidder raises the amount above the minimum he will pay. The minimum bid is the amount decreed by the court, being delinquent taxes, interest, costs and penalties. Over-the-counter sales are administed by the State of Alabama Department of Revenue (ADOR.state.al.us).
Alaska: Deed – Alaska code does not specify what method to use, so the borough will decide, but many boroughs use a premium bid or a sealed bid method. Depending on the borough or city municipalities they may call the tax deed sale, land sale or a tax foreclosure sale.
Arizona: Lien – Arizona is classied as a tax lien certificate state. They use a bid down the interest rate method and are set at a 16 percent interest rate per year. They have a 3 year redemption period, and all auctions are held in February. This is also a great state to do over the counter liens.
Arkansas: Deed – Arkansas is classified as a tax deed state. They use a premium bid method, the minimum bid is the amount decreed by the court, being delinquent taxes, interest, costs and penalties. Thirty days after the sale the county issues a limited warranty deed. Over-the-counter properties are availabe through the Arkansas Commissioner of State Lands (cosl.org).
Note: This map is the best we have, but we disagree with a few minor points regarding the definition of a Redeemable Deed. A deed in legal definition is an instrument (document) that indicates a contract or conveyance. The only state marked here as using a redeemable deed that actually conveys title at the time of purchase is Texas. In Texas, a deed purchaser takes title to the property at time of purchase. In Georgia, for example, the deed entitles the buyer to take possession of the property following a one-year redemption period. In other words, the deed represents a contract of sorts, but no a conveyance. The same applies to Tennessee, Hawaii and Connecticut. What sets these states apart is that instead of accruing interest they require a flat rate penalty of anything from 10% to 20% for redemption.This makes them similar to Texas.
A more critical distinction comes in the case of Rhode Island. Rhode Island requires a penalty and interest accrual both. The first six months carry a 10% penalty, whether redemption happens the first week or the 25th week. After six month the lien accrues interest at the rate of 1% per month on top of the 10% penalty.
California: Deed – California is an oral bid state using a premium bid method; many of the auctions are online. Annually, on or before June 8, the tax collector shall publish a notice of impending default for failure to pay taxes on real property, except tax-defaulted property and possessor interests, the taxes, assessments, penalties, and costs on which will have not been fully paid by the close of business on the last business day of the fiscal year. Five years or more after the property has become tax defaulted; the tax collector shall have the power to sell and shall attempt to sell in accordance with Section 3692.
Colorado: Lien – All liens are sold using a bid-down system. The investor is required to pay the back taxes, penalties and fees, and the winning bidder is the investor willing to take the lowest interest rate. The interest rate has been set at 9 percent above the federal discount rate. After a period of 3 years you can apply for the deed to the property.
Connecticut: Penalty deed – Connecticut is classified as a hybrid penalty state. Connecticut has both counties and municipalities that oversee tax collection. The local tax collector oversees the sale, which will be an oral public auction. State statutes do not specify when tax sales are to be conducted, but many counties and municipalities hold sales in the month of June. State statutes set an 18 percent rate of return upon redemption of all tax deeds. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the twelve month period, redemption rights are terminated and the purchaser takes possession.
Delaware: Penalty deed – Delaware is classified as a hybrid penalty state. Investors receive a rate of return of 15 percent for the 60 days. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the 60 day period, the right to redeem will be forfeited.
District of Columbia: Lien – All liens are sold using a bid-down system. The investor is required to pay the back taxes, penalties and fees, and the winning bidder is the investor willing to take the lowest interest rate. Tax liens are purchased with a 6 month redemption period. The rate of return is set by state statute at a rate of 18 percent, or 1.5 percent per month.
Florida: Lien and Deed – Florida utilizes a Tax Lien system, but also sells Tax Deeds following the two-year lien redemption period. Investors receive an 18 percent rate of return annually, but are guaranteed a minimum return of 5 percent on liens that redeem early. Liens are sold using a bid-down interest system. The investor is required to pay the back taxes, penalties and fees, and the winning bidder is the investor willing to take the lowest interest rate. At the end of the redemption period, the lien holder can apply for a deed, at which point the property is sold as a tax deed in a premium bid auction.
Georgia: Penalty deed – Georgia is classified as a hybrid penalty state. Similar to tax liens, tax deeds sold in Georgia are purchased with a one year right of redemption. A penalty rate of 20 percent applies to the redemption of all tax deeds. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the twelve month period, the investor may begin the process of terminating redemption rights.
Hawaii: Lien – Similar to other states, tax liens sold in Hawaii are purchased with a one year right of redemption if the deed to the property is recorded within 60 days of the sale. If the deed is recorded later then 60 days from the auction date, the redemption period applies one year from the recorded date. A penalty rate of 12 percent applies to the redemption of all tax liens.
Idaho: Deed – Tax sales are typically conducted in the month of May. Properties are sold by premium bid, with the board of county commissioners reserving the right to reject any and all bids. They also have authority to accept or reject bids for less than the minimum bid set.
Illinois: Lien – Illinois is classified as a tax lien certificate state, they have an 18 percent interest rate along with a two year redemption period. This is a great state to invest into but you must be there in person to do so.
Indiana: Lien – Currently, the maximum interest rate being offered to all Indiana tax lien certificate investors will vary from 10% to 25% with a one year right of redemption. Varies upon when it is redeemed. 10% interest if redeemed within six months of the sale; 15% if redeemed after six months but no more than one year after the sale; and 25% if redeemed more than one year after the sale. Occasional "Commissioner Sales" offer deeds on surplus properties.
Iowa: Lien – Currently, the maximum interest rate being offered to all Iowa tax lien certificate investors is 24% with a two year right of redemption. Annually, on the third Monday in June the county treasurer shall offer at public sale all parcels on which taxes are delinquent.
Kansas: Deed – Tax sales are usually conducted between the months of August and October, although no specific date is set by state statute. Some counties actually allow bidding to begin below the lien amount or set no minimum bid at all. Deeds are sold to the person bidding the highest amount above the minimum bid.
Kentucky: Liens – Tax liens in Kentucky are purchased with a one year right of redemption. The rate of return is 12 percent annually, or 1 percent per month. The state also enforces a penalty of 10 percent of the total lien amount as compensation to the local tax collector.
Louisiana: Penalty – Louisiana is classified as a penalty state. Tax sales are generally conducted between January and April, but are not specified in statutes. Similar to tax liens, tax deeds sold in Louisiana are purchased with a 3 year right of redemption. Investors receive a rate of return of 1 percent per month, or 12 percent annually. Investors also receive a penalty rate of 5 percent upon redemption, making the total rate of return 17 percent. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the 36 month period, the right to redeem will be forfeited.
Maine: Penalty Deed – Maine is classified as a Penalty Deed State. Property taxes are collected at a city level, rather than a county level. Tax sales may be conducted in the month of February, but vary from city to city. Properties are sold to the highest bidder by way of sealed bid. If redeemed, the property owner will pay an interest rate of 8 percent annually.
Massachusetts: Hybrid Penalty Deed – Massachusetts offers penalty tax deeds with a 6 month right of redemption. The original owner may redeem by paying the purchase price plus interest at the rate of 16% per annum. The collector shall execute and deliver to the purchaser a deed of the land.
Maryland: Lien – All liens are sold using a premium bid system. The investor is required to pay the back taxes, penalties and fees, and the winning bidder is the investor willing to take the lowest interest rate. Maryland’s rate of return varies from 6 percent to 24 percent depending on the county. The tax sale is conducted by oral bid, and follows a Premium bidding system.
Mississippi: Lien – Mississippi uses a premium bid method; with the starting minimum begin at the delinquent taxes, penalties and any administrative cost involved. Mississippi has an 18 percent interest rate with a two year redemption period. Mississippi also conducts tax deed sales of surplus properties in many of its counties, held on the first Monday in April
Minnesota: Deed – Minnesota is an oral bid state. Tax sales are typically conducted in the month of May, but may be set by the individual counties. The minimum bid is set by state statute as the appraised value of the property, making deed purchases here very expensive. .
Michigan: Deed – Counties have the option to either oversee tax deed auctions, or appoint the Department of Natural Resources to oversee and conduct annual tax sales. Tax sales may be conducted after the third Tuesday in July. Most sales take place in the months of August and September. Michigan uses a premium bid method. Properties that are more than three years delinquent on the first of the year undergo a judgment of foreclosure on March 31st.
Missouri: Lien – Missouri divides properties into first, second, third and fourth lien offerings. Each offering represents a single year of delinquent taxes. First and second year liens are awarded to bidders based on the bidder accepting the lowest percentage of interest in the property. Third and fourth year liens are sold to the highest bidder. Fourth year deeds are essentially tax deeds and are purchased with no redemption rights. Tax liens are purchased with a 2 year right of redemption. The rate of return is set by state statute as “not to exceed 10 percent annually”, and varies from county to county.
Montana: Lien – Liens certificates are sold through a process of random selection, or rotational bidding. The investor in only required to pay the back taxes, penalties and fees, and will receive the full interest rate. The rate of return is set at 10 annually or 5/6 of 1 percent plus month. A 2 percent penalty rate applies to properties redeemed penalty within the first year.
Nebraska: Lien – The interest rate has been set at 14 percent annually, or 1.16th percent per month. Liens certificates are sold through a process of random selection, or rotational bidding.
Nevada: Lien and Deed – Nevada have both tax liens and deeds. Clark County holds tax lien certificate sales, and other counties hold tax deed auctions.
New Hampshire: Deed and Penalty Deed – New Hampshire is classified as a tax deed state, but they do conduct penalty deed auctions as well. For counties or municipalities that sale Penalty deeds there systems is similar to tax liens, tax deeds sold in New Hampshire are purchased with a two year right of redemption. A penalty rate of 18 percent applies to the redemption of all tax deeds.
New Mexico: Deed – New Mexico hold tax deed auctions every year. This is the one state that the mortgage lien sticks to the title even after the auction, so you must check that before investing in that state.
New York: Deed – New York can have both lien and deed auctions but most counties have tax deed sales, New York City being the exception, as it sells lien certificates. New York is an oral bid state and they use a premium bid method.
New Jersey: Lien – Tax liens are purchased with a 2 year redemption period. The rate of return is set by state statute as “not to exceed 18 percent annually” and varies from county to county. Some counties offer certificate holders redemption penalties in addition to the set rate of return.
North Carolina: Deed – North Carolina is classified as a tax deed state. North Carolina is an oral bid state and they use a premium bid method.
North Dakota: Deed – The State mandates that the sales are conducted in November and December. The tax sale properties that will be auctioned using a premium bid method. The winning bidder will receive a quit claim deed to the property
Ohio: Lien and Deed – Ohio counties with population over 200,000 are allowed to sale tax lien certificates at there public auctions each year. Publication of auctions is advertised locally prior to the sale. Ohio utilizes a Tax Lien system, but also sells Tax Deeds that pass the two year redemption period at public auctions. For tax lien certificate investors receive an 18 percent rate of return annually, with a 1 year redemption period.
Oregon: Deed – Oregon is classified as a tax deed state they conduct there sales as oral bid auctions. Most counties will use a premium bid method, based on 67% of market value - a very high opening bid.
Oklahoma: Deed – New legislation amended Oklahoma code to eliminate the October certificate lien sale; now properties that remain delinquent and unpaid for three years or more are governed by the state "resale statutes," which creates a deed auction on the second Monday of June. Oklahoma also deeds over the counter.
Pennsylvania: Penalty Deed – Pennsylvania is classified as a penalty state. Tax sales are very similar to those in tax lien states. The County Tax Claim Bureau oversees the sale, which will be an oral public auction. In Pennsylvania the investor generates a 10 percent penalty rate per year with a two year redemption period.
Rhode Island: Penalty – Rhode Island is classified as a penalty state. Tax sales are generally conducted in August but it is not specified in state statutes. Investors receive a penalty rate of return of 10 percent annually with of 1 percent per month after six months up to the redemption period, making the total of 16 percent for the total year.
South Carolina: Lien – The Treasure conducts the tax lien auction, with all counties using a premium bid system. The interest rate ranges depending on when the certificate is redeemed. Thirty days after the 12 month redemption period is over the county will issue the investor a quit claim deed.
South Dakota: Lien – Liens are sold using a premium bid system. The investor is required to pay the back taxes, penalties and fees, and the winning bidder is the investor willing to take the lowest interest rate. The interest rate has been set at 10% a year. After a period of 3 years you can apply for the deed to the property.
Texas: Penalty Deed – Texas is classified as penalty state. Similar to tax liens, tax deeds sold in Texas are purchased with a six month right of redemption for non-homestead properties and two years on homestead properties. A property is considered homesteaded when it is the owner's primary residence as declared on an income tax return. A penalty rate of 25 percent applies to the first year and an additional 25 percent for the second year.
Tennessee: Penalty Deed – Tennessee is classified as a penalty state. The County Clerk and master of the Chancery Court oversees the sale, which is an oral public auction. A penalty rate of 10 percent applies to the redemption of all tax deeds.
Utah: Deed – Utah utilizes a tax deed system to collect delinquent property taxes. In all of the 29 Utah counties the auction will be conducted at the county courthouse, and in most counties you can register the day of the sale. The sale is usually held on the third or fourth Thursday in May and the counties will use a premium bid with the exception of Salt Lake and Utah counties, which utilize a bid down of ownership method.
Vermont: Penalty – Vermont is classified as penalty state. The local tax collector or treasure oversees the sale, which will be an oral public auction. Similar to tax liens, tax deeds sold in Vermont are purchased with a one year right of redemption. A penalty rate of 12 percent applies to the redemption of all tax deeds.
Virginia: Deed – Virginia is classified as a tax deed state. In all of the 94 Virginia counties the auction may be conducted at the county courthouse, or in a county approved setting. In some cases and jurisdictions a third party lawyer may be used to administer the foreclosure proceedings and conduct the sale. Virginia uses a premium bid method in most of the county auctions.
Washington: Deed – Washington utilizes a tax deed system to collect delinquent property taxes. In all of the 39 Washington counties the auction will be conducted at the county courthouse with registration beginning the day of the sale. Washington counties use a premium bid method in most of there auctions.
West Virginia: Lien – West Virginia uses a premium bid method, with the starting minimum being at the delinquent taxes, penalties and any administrative cost involved. West Virginia has a 12 percent interest rate with an eighteen month redemption period. West Virginia does sell deeds over the counter.
Wisconsin: Deed – Wisconsin is classified as a tax deed state. The tax sales are called sales of tax delinquent real estate. They use two different methods in there tax sale auctions first is the premium bid method and also in some counties they use the sealed bid method.
Wyoming: Lien – The interest rate has been set at 15 percent annually, plus a mandatory 3 percent penalty for the first year. And all the tax liens will be sold in a random selection method with means pulling random names from a pool. The investor then has the option to purchase that tax lien, or pass to the next investor.
