Online Tax Certificate Sale - June 1 (Bidding Now Open)

For those curious, like myself -

What are tax certificates?

In Florida, taxes become due November 1, and become delinquent if not paid by April 1 of the following year. The tax collector in every Florida county then prepares a list of the properties with delinquent taxes and sends out notices to all property owners with unpaid property taxes stating that a tax certificate will be auctioned on or before June1 if the taxes are not paid.

The tax certificate?s face amount consists of the sum of the following: delinquent real estate tax (unpaid amount), interest (1.5% for each of the months of April and May on the delinquent amount), Tax Collector?s commission (5% on the delinquent amount), and the newspaper?s advertising charge (& sale costs or other costs).

Tax certificates are a first lien against property which means there are very few other claims against a property which would be paid before the tax certificate lien. It even supersedes some IRS liens.

The Auction

The property taxes become delinquent on April 1. On or before June 1 the Tax Collector must start the tax certificate auction (Note: tax certificates and the auction of them is governed by Chapter 197 of the Florida Statutes. All requirements mentioned in this document come from Chapter 197 without the legalese).

To make a simplified analogy, think of the purchase of a tax certificate as a loan to the property owner. In return, the investor receives interest on the money loaned.

In Florida, the tax certificate conveys no property rights. It is simply a ?loan? carrying an interest rate.

The certificates are advertised once a week for three consecutive weeks before the auction.

The interest on a certificate ranges from 0 to 18%. Bids are entered with the certificate going to the bidder willing to take the lowest interest rate. Simple interest accrues on a monthly basis. If the certificate carries an interest rate of 12%, then interest will accrue at 1% every month until the certificate is redeemed. Once a certificate is issued, providing the redemption of the certificate is after May 31, the least an investor will receive in interest is 5% (Florida Statutes) except for a bid of 0%. A certificate won with a 0% bid earns no interest. The investor is guaranteed 5% over the life of the certificate IF THE CERTIFICATE IS REDEEMED. Certificates are good for 7 years from the date of issuance. At the end of 7 years, the certificate is retired (no longer exists). If the certificate is not sold to an individual, a certificate will be issued to the county bearing an interest rate of 18%, and may be purchased by visiting the tax collector?s office. Most counties today do not issue actual certificates anymore. The certificate is kept as an electronic file at the Tax Collector?s office.

The 2009 Online Sale of Tax Certificates on Delinquent Walton County Property Tax Accounts is June 1st. You may review the accounts that are now available for bids at Walton The site includes a tutorial and other information related to the Tax Certificate Sale process. Our office is also available to answer any questions you might have. 892-8121.

Holy Cow! What exactly does this mean? I was blown away at the sheer number. If these properties are delinquent on taxes would it be safe to assume they aren't paying association dues? Maybe it's a silly question, but I have to wonder. I ask because my interest lies within Watercolor and there are pages of delinquencies. :yikes: How would such an association deal with this? Are these showing because of some sort of book keeping backlog?? I know some of these properties as homes in foreclosure, but some I'm not aware of. Can I assume they soon will be? I guess for a layman, what does this mean?

Holy Cow! What exactly does this mean? I was blown away at the sheer number. If these properties are delinquent on taxes would it be safe to assume they aren't paying association dues? Maybe it's a silly question, but I have to wonder. I ask because my interest lies within Watercolor and there are pages of delinquencies. :yikes: How would such an association deal with this? Are these showing because of some sort of book keeping backlog?? I know some of these properties as homes in foreclosure, but some I'm not aware of. Can I assume they soon will be? I guess for a layman, what does this mean?

:idontno: I think it means you might be able to get a deal~~~~~😀

9,400 parcels in un-paid taxes. It is like a who's who in Walton County. You can even buy a Country Club. I am floored how bad it is now. I am just....stunned. Not one area has not been touched by this. Banks are not paying, home owners who live here, big time money that must have gone bust...I mean it is all over the board.

Interesting, you become the collection agency in a way -

To make a simplified analogy, think of the purchase of a tax certificate as a loan to the property owner. In return, the investor receives interest on the money loaned.

..

Certificates are good for 7 years from the date of issuance. At the end of 7 years, the certificate is retired (no longer exists).

This seems like risky business. How many of these folks will simply walk away and not pay? You would need infrastructure in place to insure collection.

The county apparently is using this to offload it's collection responsibilities, which is understandable. There are companies out there willing to risk the loss of principal and attempted collection cost for the interest on the principal. That's something a county government would likely prefer to avoid - they'll get payment up front for every certificate.

9,400 parcels in un-paid taxes. It is like a who's who in Walton County. You can even buy a Country Club. I am floored how bad it is now. I am just....stunned. Not one area has not been touched by this. Banks are not paying, home owners who live here, big time money that must have gone bust...I mean it is all over the board.

I am stunned that someone doesn't know what's been going on with the real estate market. 😀

Interesting, you become the collection agency in a way -

Thus the name - tax collector. :wave:

I am stunned that someone doesn't know what's been going on with the real estate market. 😀




Thus the name - tax collector. :wave:

I suppose it is true, I do not understand the magnitude of what is happening in real estate, especially along 30-A. I am shocked however to see the number of homes/properties who haven't paid their property taxes. It is safe to assume that this means the mortgage payments aren't being made, because at least "some" of these mortgages would include escrowed accounts for taxes and insurance. Why haven't these properties at least tried to sell the home at some point? Some aren't on the market at all and some are still asking 1.5 to 2 million for the house when homes right down the street (and I mean a couple of houses down) are selling for under a million? Yes, yes I understand that in a lot of cases the home owners are underwater. It's not like this hasn't been coming. I'm not trying to judge the decisions of people who are in stressful situations, but it does seem something other than need is driving the decisions. My point, and therefore question, is.. when do the banks, builders, homeowners stop being so greedy and start facing reality?? If you can't make the payment, including banks, shouldn't you just drop the price and get it off the books??? Properties are selling right??? I'm sure these homes wouldn't even appraise for the asking prices... what are they doing?? I am "stunned" at this kind of decision making. I don't understand and was looking for someone to explain why the elevated prices still exist when so many people are clearly in trouble. Can I assume the bottom will drop again at some point, or are we as buyers going to still buy homes speculating that this is the bottom and virtually reward those holding out for these inflated prices?:idontno: These are not rhetorical questions for me, I am asking you guys, as professionals, what is going to happen next?

Holy Cow! What exactly does this mean? I was blown away at the sheer number. If these properties are delinquent on taxes would it be safe to assume they aren't paying association dues? Maybe it's a silly question, but I have to wonder. I ask because my interest lies within Watercolor and there are pages of delinquencies. :yikes: How would such an association deal with this? Are these showing because of some sort of book keeping backlog?? I know some of these properties as homes in foreclosure, but some I'm not aware of. Can I assume they soon will be? I guess for a layman, what does this mean?

It means that your association dues will more than likely increase dramatically to make up for the loss of revenue.

I suppose it is true, I do not understand the magnitude of what is happen...next?

While I don't know numbers compared to previous years, and imagine they are higher, it is common for a large percentage of people to wait until the very last minute to pay taxes.

Any updates on how the tax certificate sale proceeded in Walton County? In Leon County/Tallahassee they attempted to auction about $20 million in tax certificates (face amount). $1.7 M had no bids so they had to extend the deadline to today in an attempt to lure buyers. Winning interest rates have been very high in the 15% to 18% range.

I did a bit more digging and according to this:
https://www.waltontaxsale.com/users/bid_results.cfm

Walton County only sold less than half the certificates. What happens to the rest?