Have you ever thought about what happens if you don’t pay your property taxes? If you don’t pay your taxes, why is the first Monday in March important to you?
Recently I attended one of the best and most interesting continuing education classes that I have ever been to - “Investing in Tax Lien Certificates.” Honestly, I had no idea how this process works.
Your county depends on all taxes being paid in order to sustain their budgeted items - school, roads, community hospitals, fire departments, and more. In order to secure payment of taxes, unpaid taxes are auctioned off to investors in the form of tax lien certificates. Investors range from a single individual to large corporations. Most often these investors are interested in the interest rate they receive, which in Otoe County is 14%, and not necessarily obtaining the property. A tax lien certificate does not give the investor ownership of the property.
Usually property owners will pay their delinquient taxes with the 14% added on. Sometimes the mortgage company pays off the tax lien certificates. In return, the investor is paid their investment back plus 14%. Consequently, if the investor buys tax lien certificates on a property for three years (in Nebraska), they have the option of foreclosing on the property and obtaining ownership. The entire process is much more in depth than what I am providing you here, but this should give you an idea of what happens if you don’t pay your property taxes.
This auction takes place on one day each year and the first Monday in March is the day in Otoe County. It is not a regular auction with the product going to the highest bidder. The person who pays the total amount due, for the smallest percentage of ownership of the parcel is the winning bidder. I have never been to a Tax Lien Sale, but that’s where I plan to be on Monday! I’ll update you with more information next month!!!