I’m Ted Thomas, I have been involved with tax lien certificates and tax deed real estate investing for over 30 years.
Today I’m answering your questions about the Pasco County tax deed sale, and the topics I’m going to cover are:
- Pasco County Real Estate Auctions
- What Is a Tax Lien Sale?
- The Process Begins With Selling Tax Liens in Florida
- Requesting a Tax Deed Sale
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Pasco County Real Estate Auctions
The Pasco County tax deed sale is actually an auction. To participate at the auction, the county clerk and controller requires you have a deposit of at least 5% of the estimated high bid or $200, whichever is greater, for each item that you anticipate winning at the Pasco County tax deed sale.
For clarity, the county refers to this public auction as a tax deed sale, however, in reality it’s an auction where the highest bidder will win the property, and the mortgage and deed of trust loan will be canceled.
Florida has two auctions when it comes to tax defaulted real estate. The first is the tax lien certificate sale.
What Is a Tax Lien Sale?
In my opinion, Florida is a benevolent state. Not all but about half of the states are similar to Florida in that they auction tax lien certificates which allow the property owner to remain on the property.
Nationwide there are over 3,000 individual counties. Approximately, half of the counties will sell tax lien certificates. The other half of the counties will seize the tax defaulted real estate and then resell the property at a tax deed auction with starting bids of the delinquent property taxes.
The tax lien certificate states handle tax defaulted property owners by issuing a tax lien certificate which is a lien, an encumbrance against the property.
Tax lien states and counties do not immediately push or remove the property owner off the property. The property will be in default, however, the owner will remain on the property and be given time to redeem the tax lien certificate by paying the back property taxes and penalties. If they don’t pay, then once the certificate matures, they will be evicted.
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The Process Begins With Selling Tax Liens in Florida
In order to understand how the Pasco County tax deed sale works, you should understand that Florida requires two auctions, and the first auction is the tax lien certificate auction.
The Florida legislature is like all 50 other legislatures across the country. They mandate that property owners pay property taxes. If the property owner fails to pay property taxes, the treasurer is authorized to confiscate the property and sell the property with starting bids of very close to back taxes at auction.
In Florida, the county will give due process notices of default that delinquent property taxes to be paid. If the property owner fails to come forward and pay the delinquent tax and penalties, the treasurer will issue a tax lien certificate.
Tax lien certificates are sold at public auctions online and offline and pay generous interest rates. Florida pays up to 18%.
In Florida, tax lien certificates have a two-year maturity. That means the property owner will remain on the property for two years without paying taxes, so the certificate owner must wait two years.
Requesting a Tax Deed Sale
If the certificate owner isn’t paid once the certificate matures, the certificate holder must request that the county create a second auction and sell the property at a tax defaulted auction.
In Pasco County, the second auction is referred to as a Pasco County tax deed sale.
At the Pasco County tax deed sale, the property may sell for higher than the minimum bid. The minimum bid consists of back taxes plus accrued interest. If the property sells for more, the highest bidder will own the property free of a mortgage or deed of trust.
From the proceeds of the auction, the original tax lien certificate buyer will be paid a 100% return of capital plus the interest rate, which has been accruing for the past 2 years.
We hope you enjoyed Ted’s lesson, “Pasco County Tax Deed Sale”
In summary, in order to have a Pasco County tax deed sale, the county will have previously conducted a tax lien certificate auction. Approximately two years later, if the property owner has not paid the tax lien certificate, the property will be reauctioned at a tax deed sale at the request of the tax lien certificate holder.
Funds above the minimum bid will cause a new buyer to take possession, however, the original tax lien certificate holder will be paid a 100% return of capital plus the accrued interest. If the property does not sell above the minimum bid, then the tax lien certificate holder will become the owner of the property.
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.
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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.