For The First Time, Massachusetts Town To Actually Call In Property Tax Collections
January 3rd, 2011
In Acton, Massachusetts, the board of selectmen has adopted a “startling” new policy: they are going to get out there and collect those property taxes![1] That’s right: property owners who owe back property taxes from as far back as 1984 could face seizure if they do not pay up. Interestingly, however, the assistant town manager is telling debtors not to worry. “I can’t just go out and take your house,” he has said, adding that he has only seen two properties seized by the town for sale via tax lien auction in the past 25 years. However, this year, properties will be seized and they will go to auction, he said.
Property owners – and tax lien investors – will get their first look at the properties that are potentially in peril when the list of debtors hits the news paper. The town will put a lien on the properties that remain unpaid at the end of the fiscal year, and the next three-and-a-half years will be spent in foreclosure court. Only at the end of this tedious process can the town auction off the deed as a tax lien and get, at a minimum, the property taxes owed on the property.
Extended – and apologetic – processes like this one can make tax lien investing pretty difficult for tax lien investors, and many prefer to invest in areas that are friendlier to “third-party buyers” of property tax debt. However, letting the city foreclose on the property before you buy means that you walk away from the tax auction with a deed, which is very appealing to other investors. What type of tax lien investing do you prefer?
We love to hear your comments! Please leave insights and questions below.
[1] http://www.wickedlocal.com/acton/news/x1599382816/Acton-Town-Collector-Check-your-tax-bill
January 3rd, 2011 at 11:37 AM
Getting a deed is well and good…but since the liens represent a long uncollected period…how will this reflect in the bidding procedure and what will the bidder have to cover in his bid? What (if any) redemption practices will be available to the forclosed property owner and for what period of time?
January 3rd, 2011 at 3:49 PM
How do you help people make money on these siezed properties?
Thanks for the info.
January 3rd, 2011 at 11:41 PM
how do tax deeds work in alabama
January 4th, 2011 at 11:40 AM
Alabama is a lien state. This means at an auction you are bidding on a tax lien on the property and not the deed. The rate of return in Alabama is 12%, or more specifically, 1% per month. Any lien not sold at auction is turned over to the state. The redemption period is 3 years. If the property owner does not pay you your bid amount plus interest in three years, you may apply to the probate court for a deed. You must wait another three years in order to get insurable title.
January 9th, 2011 at 9:57 PM
if you buy a property by paying back taxes. if its been at least 3 years can you get the deed? and can you sell the property.
Every state is different, Kristy, but we’ll be putting up some great information on how to find out these kinds of details for your preferred area of the country in the near future, so stay tuned! Thank you for reading!