Tax Lien States
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The following table contains information on the states that use tax lien sales as a method for collecting delinquent property tax. Each column in the table is described below:- Auction Bidding Type: This column indicates the most common bidding type used statewide at online and public tax auctions. Bidding types can vary by jurisdiction. For more information on auction bidding types, see the Auction Bidding Methods article.
- Redemption Period: The redemption period for a tax lien or a redeemable tax deed generally starts as soon as the property is first offered for sale through a tax lien or tax deed sale. The property owner must redeem the property (pay all back taxes, interest, penalties, and costs) within the redemption period or risk losing the property to the investor. In most states, the investor may begin the foreclosure process, with the goal of obtaining the property, once the redemption period ends.
- Post-Sale Interest Rate: This is the per annum simple interest rate that accrues on tax lien certificates or redeemable tax deeds. Essentially, this percentage is the return on investment (ROI) for the tax lien or tax deed investor. There is no interest rate associated with non-redeemable tax deed states since there is no redemption period. However, for redeemable tax deed states, interest does accrue after the purchase of a tax deed and is awarded to the tax deed investor if the property owner redeems the tax deed (pays all back taxes, interest, penalties, and costs) before the expiration of the redemption period.
- Post-Sale Flat Rate Penalty: A flat rate penalty is a penalty that is generally assessed immediately after the sale and added to redemption amount that the taxpayer must pay to redeem a tax lien certificate or redeemable tax deed. Some states assess additional flat rate penalties at specified periods through the redemption period.
Tax Lien States
| State | Auction Bidding Type | Redemption Period | Post-Sale Interest Rate (per annum) | Post-Sale Flat Penalty |
| Alabama* | Premium | 3 Years | 12% | None |
| Arizona | Bid Down Interest | - 3 Years for Judicial Foreclosure - 5 Years for Non-Judicial Foreclosure | 16% (maximum) | None |
| Colorado | Premium | 3 Years | 9% + Federal Discount Rate | None |
| Florida* | Bid Down Interest | 2 Years | 18% | None |
| Illinois | Bid Down Interest | - 6 months for Vacant Land at Scavenger Sale - 2 Years for Unoccupied Residences or Vacant Land - 2 1/2 Years for Occupied Residences - 3 Years for Occupied Residences with 6 or more Units | 18% (maximum) | 10% penalty applied immediately and every six months thereafter - 0-6 Months: 10% - 6-12 Months: 20% (cumulative) - 12-18 Months: 30% (cumulative) - 18-24 Months: 40% (cumulative) - 24-30 Months: 50% (cumulative) - 30-36 Months: 60% (cumulative) |
| Indiana | Premium | 1 Year | 10% (only earned on premium amount) | - 10% penalty applied immediately after sale - 15% penalty applied six months after sale |
| Iowa | Bid Down Percentage of Ownership | 2 Years | 24% | None |
| Kentucky | Premium | 1 Year | 12% | None |
| Maryland | Premium | - 6 Months for Improved and Vacant Land - 60 Days for Improved Land not meeting Building Code | 6%-20% (Varies by County; Lowest Allowed - 6%; Highest Allowed - 24%) | None |
| Mississippi | Premium | 2 Years | 18% | 5% penalty applied immediately after sale |
| Missouri | Premium | 2 Years | 10% | None |
| Montana | Rotational | - 3 Years for Improved Land - 2 Years for Vacant Land | 10% | None |
| Nebraska | Bid Down Percentage of Ownership | 3 Years | 14% | None |
| New Jersey | Bid Down Interest (to 0%) and then Premium | 2 Years | 18% (maximum) | 2%-6% penalty applied immediately after sale (rate is dependent on municipality and lien amount) |
| New York* | Premium | 2 Years | 12% | None |
| Ohio* | Bid Down Interest | 3 Years | 18% (maximum) | None |
| Rhode Island | Premium | 1 Year | None | - 10% penalty applied immediately after sale - An additional 1% penalty applied in months 7-12 of the redemption period |
| South Dakota | Bid Down Interest | 3 Years | 10% | None |
| West Virginia | Premium | 17 Months | 12% | None |
| Wyoming | Rotational | 4 Years | 15% | 3% penalty applied immediately after the sale |
* This state also holds tax deed sales