What Is A Government Foreclosure Tax Sale
A government foreclosure tax sale is a kind of auction that lets you have access to properties that have been foreclosed. Every property owner is required to pay the government a real estate tax on a regular basis. If the property owner fails to pay this required tax, the government will put the property on sale. Whatever the government has earned during the auction will help in generating the tax income that has been lost.
Basically, there are two types of government foreclosure tax sale: the lien and the deed. In lien tax foreclosure sales, you are only allowed to tax the lien. However, this does not make you the outright owner of the property because once the tax is settled, the government then returns the property to the homeowner. This home owner now owes you the tax that you paid for the lien. Your advantage to this kind of sale is that the government can allow you to charge around 18 percent for the money that you used for paying the tax. If the homeowner fails to pay you the owed tax lien money, you can request for a foreclosure and the property is yours. This type of sale is generally a win-win situation especially if you know all the facts about your case.
Another type of government foreclosure tax sale is the tax deed sale. In this type of sale you are required to pay any back taxes plus interest charges, court fees, and other applicable fees. Purchasing tax deeds are often effective and practical because aside from paying the back taxes (which are only a small portion of the whole market value), you could also acquire the property at less than its actual market price. Just make sure that you research on the property before you make the purchase to minimize your investment risks.