Tax Sale Investing

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Here is what you need to know:

Tax liens are sold for the amount of delinquent taxes, interest charges and related fees due to a Parish. If you buy at the tax sale, you purchase a “tax deed” from the tax collector, usually the Sheriff, and you have a “tax sale title.” This is then reflected by the filing of a tax sale certificate in the Parish’s public records. The owner now has three years to “redeem” the property. To redeem the property, an owner has to pay the price you paid (including any taxes you have paid on the property since the tax sale) plus a 5% penalty and 1% interest per month and whatever costs the parish charges for the transaction.

Once the three year redemptive period expires you may be put into possession of the property. This involves an attorney filing a “Suit to Quite Tax Title,” against the former owners of the property and asking the court to terminate their ownership and recognize yours. Once service is perfected and they have received notice of the suit, they have six months to sucessfully annul the tax sale. If they don’t, you will be put into possession of the property. The timeline can be shorter under certain circumstances.

Let Title Stream know if you are interested in learning more about this process!