Most property owners know that property taxes are due on November 1 of each year, and are considered delinquent if not paid by April 1 of the following year. Taxes paid early receive a discount of up to 4% if paid in November, which decreases by 1% each subsequent month until March when there is no discount. However, less often understood is the process that begins on April 1 when property taxes become delinquent.
Delinquent taxpayers receive notices in May warning them of the pending sale of a “tax certificate.” Tax certificates are advertised in May, and auctioned to investors on about June 1 of each year. The investor who bids the lowest interest rate on a certificate wins the auction, and is entitled to collect interest at the bid rate. That rate may be between 0 and 18%, in .25% increments. The certificate will survive for 7 years, and accrues interest until “redeemed” when payment is made to the Tax Collector’s office.
If a certificate is not redeemed within 22 months of June 1st of the year it is issued (or, viewed differently, 2 years from April 1 of the issue year), the holder of that certificate may apply for a “tax deed.” The certificate holder must follow certain procedures, including making payment for all outstanding taxes and tax certificates as well as for certain application and processing fees. If the property owner does not act before the tax deed process is completed, ownership of the property will be transferred to the holder of the tax certificate.
If you own property subject to outstanding tax certificates that are nearing the two year mark, or are the holder of such a tax certificate, a Florida real estate attorney can advise you on your specific rights and obligations.