Florida Tax Lien Certificates

Type of Tax Sales in Florida Counties

Each of the 67 counties in Florida conduct auctions for Tax Lien Certificates with a peak 18% Interest Rate. The face value of each Tax Lien Certificate is the total of Taxes, interest penalties, and other costs associated. The Tax Lien Certificates are then bided down by the interest rate. So, the bidding starts at 18% and declines with each bid. The minimum interest rate is 5%.

When are the auctions held?

Florida auctions are held on or before June 1st of each year.

The Tax Lien Process in Florida

In Florida, rather than bidding on the property itself, you are really bidding on the right to collect interest on default property taxes. The former owner or anyone who holds an interest in the property may redeem each Tax Lien Certificate sold at auction within 2 years. To redeem the Tax Lien Certificate the former owner must pay the total of; the face value of the tax lien, accrued interest, and any other costs associated. Even if the Certificate is redeemed immediately after it is bought, the redeemer must pay the minimum 5% interest. If the Tax Lien certificate is not redeemed within 2 years, the property itself can be foreclosed upon, and sold at auction. This is know as a “Public Oral Bid Foreclosure Auction.”
In some states, when a Tax Lien Certificate is not redeemed, the holder of the Certificate can apply for a deed to the property. But in Florida, the only way to get a deed to a property is through a “Public Oral Bid Foreclosure Auction”, which takes place once a Tax Lien Certificate is not redeemed. After the Redemption period has ended, the holder of the certificate may apply for a deed to the property by presenting the certificate to the Tax Collector. The Tax Collector sends the certificate to the Clerk of the Circuit Court. The Clerk sets a sale date and then must advertise the auction to the public. The minimum bid is the total of Taxes owed, interest penalties, and other costs associated. But, if the property is classified as a “Homestead” property, then the minimum bid is one-half of the assessed value. If someone makes the winning bid other than the holder of the Tax Lien Certificate, the holder is paid the total of the following. The face value of the Tax Lien Certificate, the amount of the deed application, other costs, and 18% interest for each year after you filed your application for deed.

Here’s an example, where the Tax Lien Certificate was bought at 15% Interest, was not redeemed within 2 years, and sold at auction 3 years after filling for a deed:

Tax Lien Certificate Face Value: $10,000.00

Interest Rate: 15.0%

Other Costs: $1000.00

Deed Application: $15.00

$10,000 (Face Value)
plus $3,000 (Interest @ 15% for 2 years)
minus $1,000 (Costs)
minus $15 (Deed Application)
plus $5,400 (Interest @ 18% for 3 years)
Total $17,385