Today I’m answering your questions about how Putnam County tax deed sales work, and the topics I’m going to cover are:
- The Florida Statute on Tax Delinquent Properties
- Florida Tax Lien Sales Are Reverse Auctions
- Paying Someone Else’s Delinquent Property Taxes
- How a Florida Tax Deed Sale Affects the Certificate Holder
- Putnam Auctions Are Held Online
I’m Ted Thomas, and I‘ve been involved with tax lien certificates and tax deed sales, which are really auctions, for the past 30 years as an investor and a guide for others.
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The Florida Statute on Tax Delinquent Properties
Putnam County tax deed sales take place in Florida, which is a popular location for investors to purchase alternative investments like tax lien certificates and tax deeds.
The process begins with the property owner failing to pay property taxes. The legislature, which is located in the capital of Tallahassee, has enacted laws that make it mandatory to pay property taxes, and all property owners must pay. 197 is the Florida statute number.
In my opinion, Florida is a benevolent state. I say that because the rules allow the property owner to stay on the property for up to 2 years after they’ve defaulted.
The county wants the tax money, but they also want to protect the homeowner who could be in a temporary financial problem or have a health issue.
Meanwhile, the legislature has authorized the county to place the property in default and then issue a tax lien certificate.
Florida Tax Lien Sales Are Reverse Auctions
Tax lien certificates are auctioned in the amount of the delinquent taxes plus some fees. Individuals with money can purchase these certificates.
Tax lien certificates are sold at public auctions which sometimes take place on the courthouse steps. Certificates may also be sold online. The maximum interest rate in Florida is 18%.
The bidding process is a reverse auction, which means the bidding for the certificate starts at 18% and then goes down. For example, the bidding will begin at 18%, then the next bid will be lower at 17.75%, then 17.5%, 17.25%, and so on. The lowest bidder wins.
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Paying Someone Else’s Delinquent Property Taxes
Newcomers often ask, “Ted, why would I pay someone else’s property tax? Won’t I lose my money?”
My answer is the state of Florida sells tax lien certificates, and only two things can happen to the certificate.
- The defaulted property owner can come forward and pay the tax lien certificate plus the accrued interest and any fees the county might suggest.
- The property owner could remain in default, not pay the taxes, then ultimately the property would go to another auction, and the tax lien certificate holder would be paid 100% of their capital investment plus the interest.
In most states, if the property owner doesn’t pay, the tax lien certificate holder can immediately close and take the property.
How a Florida Tax Deed Sale Affects the Certificate Holder
In Florida, the process is different. If they never pay, there will be a second auction.
At the second auction, the property will either be sold to a new highest bidder or the tax lien certificate holder will get the property. What’s important to understand is that when you purchase a tax lien certificate it is considered a safe and secure investment.
The clerk of the circuit court is responsible for conducting the tax deed sales and issuing the tax deed. Tax deeds are sold at auction to the highest bidder.
Putnam Auctions Are Held Online
Putnam County tax deed sales are held online, and the county offers a short class that covers procedures and how to use the auction website.
Bidders are required to register on the site and place a deposit prior to the start of the Putnam County tax deed sale. The deposit is $200.00 or 5% for each property that the auction attendee would like to bid on. The county accepts electronic checks, cash, cashier’s checks, and money orders.
Properties are auctioned in order of case number and sold ‘as-is.’ So be sure to do your due diligence on a property before bidding on it.
We hope you enjoyed Ted’s lesson, “How a Putnam County Tax Deed Sale Works”
All 67 counties in Florida, including Putnam County, are mandated by statute to conduct property tax auctions. If property taxes are unpaid, the county will seize the property. However, the county does not want the property. They want the revenue to pay the county’s bills.
The process starts with a tax lien certificate sold at a reverse auction, where the interest rate is bid down, and it ends with a tax defaulted auction. The auctions are public, and anyone can attend.
At Putnam County tax deed sales, the bidding begins at the back taxes, and discounts below the tax assessed value could be as much as 60% to 70%.
If you’d like to know more about tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Learn how to reap huge rewards from tax lien and tax deed investing! Get started today by taking advantage of Ted’s Free Master Class! Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.