Where can I find information on purchasing property with past due taxes?

Full Question:

There is a form that I am looking for from a seminar that I went to. I think you can purchase property at auction regarding tax liens that are levied on the property when owners are past due on their property taxes. How is that accomplished and where do you get the information regarding the process?
01/03/2007   |   Category: Taxes   |   State: Georgia   |   #53


The Tax Commissioner of each County in Georgia is responsible for collection of real and personal property taxes. The Tax Commissioner must issue a tax lien (commonly known as an execution or FIFA) against all delinquent taxpayers. A tax lien is released only when the delinquent taxes are satisfied in full. The Tax Commissioner will either collect the tax from the taxpayer or levy the property and auction it at a tax sale.

The Tax Commissioner occasionally auctions property at a tax sale for the collection of delinquent taxes. Tax sale proceedings are held according to the official code of Georgia sections 48-4-45 through 48-4-48. Sales are scheduled the first Tuesday of any given month in front of the courthouse. The bidding commences with the total taxes, fees, and interest on each parcel The tax deed is then sold to the highest bidder. Tax sales are advertised in the official county newspaper. The newspaper ad is run once a week for four weeks prior to the sale.

Before a property is advertised to be sold, the Tax Commissioner must conduct a diligent title search on the property. Following the search the Tax Commissioner we must notify all interested parties or lien holders. When a property is sold at a tax sale, all liens are erased once foreclosure is completed. This includes mortgages, liens, and federal tax liens. However, these interest holders are entitled to redeem the property within 12-months of the tax sale (sale of property).

It is the responsibility as a purchaser of a tax sale property to foreclose the right of redemption on that property. Georgia Code Sections 48-4-40 through 48-4-48 outlines the complete process. The following is a condensed version of these codes:

When real property is sold under a tax execution (sold at tax sale), the original taxpayer or any persons having a right, title, interest in, or lien upon the property may redeem the property at anytime within 12 months from the date of the purchase at tax sale by paying the redemption price. The property may be redeemed at anytime during this period until the tax sale purchaser terminates the right to do so by giving proper legal notice. The 12- month limit does not begin, however, until the tax purchaser pays the amount that he or she bid. The tax purchaser is not prohibited from consenting to redemption after the statutory period has expired, and as a matter of grace granting such a privilege.

The redemption price to be paid to the tax sale purchaser. If the original debtor chooses to redeem, the redemption price is the amount paid for the property at the tax sale, plus 20% of the amount for the first year, or fraction of a year thereafter, elapsing between the sale date and the date the redemption is made and 10% for each year or fraction of the year thereafter, plus any tax paid on the property during this period by the tax purchaser after the sale. If redemption is not made within the 30 days, and after the notice terminating the right to redeem has been properly issued and advertised, there must be added to the redemption price the sheriff's cost of serving notice and the cost of publishing the notice. All amounts comprising the redemption price are paid to the tax sale purchaser.

After the statutory redemption period has expired, the tax sale purchaser is to make original notice in accordance with a form shown in the statutes and provide a copy for each person to be served. The purchaser is to deliver these, together with a list of persons to be served, to the sheriff of the county in which the land is located, not less than 45 days before the date set in the notice for termination of the right of redemption. Within 15 days, the sheriff must serve a copy of the notice upon all persons on the list residing in the county and make an entry of such service on the original notice. Leaving a copy of the notice at the residence of any person required to be served is considered sufficient service. If the sheriff makes an entry that he or she has been unable to serve the notice on any person, the purchaser must immediately have it published in the official county newspaper once a week for two consecutive weeks. This constitutes service.

Upon payment of the sheriff's cost, the original notice must be returned to the tax sale purchaser. The notice and entries on it may be recorded on the deed records in the Clerk of Superior Court s Office in the county in which the land is located.

In the event that the property is redeemed by the original debtor or interested parties (mortgage companies, banks, or lien holders etc.), the tax sale purchaser must make a quitclaim deed (Release of Claim) to the original delinquent taxpayer, reciting, among other things, who paid the redemption money. The redemption of the property gives back to the original delinquent taxpayer the title conveyed by the tax sale, subject to all liens existing at the time of sale.

If the redemption is made by a creditor of the original delinquent taxpayer or other persons having interest in the property, the amount expended by either constitutes a first lien and must be paid prior to any other claims on the property. However, it is necessary that the quitclaim deed have been properly recorded in the Clerk of Superior Court s Office.

The purchaser of a tax sale property may sell the property before the redemption period has expired. However, the person buying from the tax sale purchaser acquires the defeasible (i.e., can be annulled) title of the tax sale purchaser, subject to the right of the original delinquent taxpayer to redeem it within the period prescribed by law (12-months).

As noted above, the purchaser receives only a defeasible title before the redemption period expires. However, the purchaser acquires sufficient interest in the property to render him or her liable for the taxes that become due on it.

No tax sale purchaser is entitled to rents and profits arising from the property during the redemption period. A tax sale purchaser may obtain a court order to enable them to make improvements upon the property in the event the improvement is aimed at the preservation of the value of said property, (i.e. a leaking roof that is causing water to damage a home). A title under a tax deed shall ripen by prescription after a period of four years from the date of execution.