WHEN DO REAL ESTATE TAXES BECOME DELINQUENT?

Real estate taxes become delinquent April 1st each year.  Example: 2007 taxes became delinquent
April 1, 2008.  At that time 3% is added to the gross amount. 

ARE DELINQUENT TAXES ADVERTISED?

A list of all real property with delinquent taxes is advertised in a local newspaper once a week for three consecutive weeks immediately preceding the tax certificate sale.  The advertisement is in parcel ID order.  The advertisement also specifies the place, date, and time of the Tax Certificate Sale.  Due to payments being received after the list is first prepared for publication, the newspaper will list more items than will be sold.  The amount advertised is the amount due for purchase of each certificate.

WHAT IS A TAX CERTIFICATE?

On or before June 1st of the same year the taxes become delinquent, the Tax Collector holds a public sale of tax certificates on all parcels on which taxes have not been paid.  The cost to purchase a certificate is listed beside each parcel in the delinquent advertisement.  This cost includes gross tax, interest, advertising cost, and the cost of the Tax Certificate Sale.

A tax certificate represents a first priority tax lien on real property; it does not convey title to the land.  Purchasing a tax certificate does not entitle the certificate buyer to enter the property, nor contact or harass the owner in any manner.  Tax certificates are investments and NOT a deed to the property.

Effective October 1, 1998, per chap. 98-167, Sec. 3, Laws of Florida, certificate holders are prohibited from contacting property owners to encourage or demand payment until two years after April 1st of the year of issuance of the tax certificate.  A certificate holder can be barred from bidding at our tax certificate sale for initiating such contact.

WHAT IS A TAX CERTIFICATE SALE?

The Tax Certificate Sale is conducted pursuant to DOR Rules & Regulations and the Guidelines of the Tax Collectors’ Association.  The tax certificate sale is NOT a sale of land, but the sale of a lien against the property.  Purchasing a tax certificate does NOT entitle the certificate buyer to enter the property, nor contact or harass the owner in any manner.

On the advertised day and time, the Tax Collector shall commence the sale of tax certificates on those lands on which taxes have not been paid.  Bidding begins at 18% and the certificate is sold to the person bidding the LOWEST annual interest rate. 

WHAT INTEREST RATES ARE APPLICABLE?

The maximum interest the law allows an individual to collect on a tax certificate is 18% per annum, simple interest.  The minimum interest received by the purchaser is 5% unless bid at zero [Florida Statutes 197.472(2)].  On certificates issued at zero percent, no interest will ever be paid on the face amount.  Interest starts accruing the month after the certificate issue date.

EXAMPLE: Bid of 18%

June through August ------------------------------------------------------ 5.00% return
September ------------------------------------------------------------------- 6.00% return
October ------------------------------------------------------------------------ 7.50% return
November --------------------------------------------------------------------- 9.00% return
December-------------------------------------------------------------------- 10.50% return
January ----------------------------------------------------------------------- 12.00% return
February------------------------------------------------------------------------13.50% return
March--------------------------------------------------------------------------- 15.00% return
April -----------------------------------------------------------------------------16.50% return
May ------------------------------------------------------------------------------18.00% return

If there are no bidders for a certificate, it is issued to the County at 18% interest.  County held tax certificates are available for purchase throughout the year.  The list of County held certificates is available on our website and is updated monthly.  The Tax Collector may also decide to hold a Supplemental Tax Sale in July.  The Supplemental Tax Sale is made up of tax certificates originally purchased at our sale in May and forfeited because of nonpayment, or any tax payments remitted with an “insufficient funds” check, or prior bankruptcies.  The same rules apply as to our May Tax Certificate Sale.  Please contact the Tax Department for additional information. 

HOW DOES THE BIDDING PROCESS WORK?

Bidding procedures may vary from sale to sale and interested parties are encouraged to review our website for current tax sale information.

Bidding is for the rate of interest only and commences at a maximum of 18% and bid inversely to 0% in minimum 1/4% increments.  The certificate is sold to the bidder who will accept the lowest rate of interest.  Bids should be placed carefully.  It is the bidder’s responsibility to ensure the parcels on which they have bids are the ones wanted.  Once a certificate has been awarded, it will not be cancelled due to an error, or change of mind by the bidder.  The bidder will be required to pay for all certificates they have won.

HOW DO I REGISTER AS A BIDDER?

Registration procedures may vary from sale to sale and interested parties are encouraged to review our website for current tax sale information. 

The Osceola County Tax Collector’s Office is required by the Internal Revenue Service to obtain the tax identification number and a completed W-9 form at the time each buyer registers as a bidder.  Upon submittal of this information, a buyer number will be assigned.

For individuals, the tax identification number (TIN) is the Social Security Number (SSN).  The individual registering must be the actual “owner” of the SSN.  It cannot be a child’s name with the parents SSN.  For most “non-individuals” (i.e., trust, estates, partnerships, and similar entities) the TIN is the Employer Identification Number (EIN) for the organization.  Please make sure the TIN you use matches the name shown on your social security card or Employer Identification form.  Annually we send 1099’s – Interest Income Tax Statements to the registered bidder and the Internal Revenue Service.  The information is reported for the name and TIN used at registration.

HOW DO I MAKE A DEPOSIT?

Deposit procedures may vary from sale to sale and interested parties are encouraged to review our website for the current tax sale information.

Bidders must place funds on deposit in order to participate in the tax sale.  A deposit in the amount of 10% of the total value of certificates you wish to purchase must be made in advance of the close of the sale.  For example, if you wish to purchase $150,000 worth of tax certificates, you must place $15,000 on deposit.  You will be able to place your deposit by wiring the money from your financial institution or by providing information on this web site the money can be electronically transferred from your bank account.  If you do not have the funds on deposit, you will not be awarded any tax certificates, even though you may have bid on them.  If you place $10,000 on deposit, you may be awarded up to $100,000 worth of certificates.  If you win $100,000 in certificates, any bids you placed on other certificates will not be considered. 

WHAT IS THE BIDDING PROCEDURE?

Bidding procedures may vary from sale to sale and interest parties are encouraged to review our website for the current tax sale information.

Within a very short time after the close of the sale, all successful bidders will receive an official computer generated certificate listing(s).   This listing includes the certificate number, account number, folio number, advertising number, taxable value, interest percent bid, and cost of certificate.  This list is certified by the Tax Collector’s Office as an accurate record of all purchases and will assist you in accurately maintaining your records.

If there are no bidders for a certificate, it is issued to the County at 18% interest and will be available for purchase at a later date.

WHEN AND HOW DO I PAY FOR MY PURCHASES?

Payment procedures may vary from sale to sale and interested parties are encouraged to review our website for the current tax sale information.

The total purchase amount less the deposit must be paid.  Payment must be made in guaranteed funds (cashier’s check, certified check, money order, or wire transfer).  Upon full payment of the purchased tax certificates, the certificate holder will be issued a receipt that indicates the tax certificate number, the amount of each certificate purchased, the property identification number and percentage bid.  ALL SALES ARE FINAL.  Pursuant to Chapter 197.432(6), Florida Statutes, if a person to whom a tax certificate(s) have been sold fails to pay the amount due the tax collector will cancel all bids and the bidder’s deposit will be forfeited.  The buyer may also be barred from future sales.

HOW ARE TAX CERTIFICATES “REDEEMED”?

In order to clear the property of the tax certificate lien, the property owner must pay the amount of the tax certificate plus the rate of interest at which the certificate was sold, calculated from the month of the sale to the month of redemption.  When a tax certificate is redeemed, on or after June 1st, a $6.25 redemption fee is also charged.  After redemption, the certificate holder receives the amount invested plus interest and is responsible for noting that the certificate is “paid” on his/her certified listing.  Certificates bid at 0% interest DO NOT accrue interest.  The payor’s remittance releases the tax lien, and the certificate holder has no further claim on the property.  Interest earned is taxable and must be reported to the IRS.  Each January, an IRS 1099-INT form is sent to each certificate holder for interest earnings in the previous year  (Chapter 197.472(1) Florida Statutes).

WHAT HAPPENS IF THE CERTIFICATE IS NOT REDEEMED?

If the certificate is not redeemed within two years from the date the tax became delinquent, the certificate holder may apply for a tax deed, and bring the land to sale at public auction.  Example: 2000 taxes became delinquent on April 1, 2001; therefore, a tax deed application may be made after April 1, 2003.  A certificate holder who wishes to apply for a tax deed must redeem all other certificates and pay other fees as mandated by state law.  Certificate holders must notify the Tax Collector’s Office in writing to request a tax deed application. 

CAN TAX CERTIFICATES BE CANCELLED?

In the event of an error in a tax certificate, it may be cancelled or corrected by the authority of the Department of Revenue.  In this case, 8% interest per annum will be paid, except as revised by law or court order (1998 or prior).  Effective October 1, 1998, per Chapter 98-167, Section 3, Laws of Florida and applicable to tax certificates sold after that date; refunds on void or corrected tax certificates will earn interest at the rate of 8% or the rate of interest bid at the tax certificate sale, whichever is less.

A tax certificate may also be cancelled if it is learned after the sale that a pre-existing stay order from the Bankruptcy Court was in effect on or before June 1st.  In that case, the amount paid for the certificate will be refunded.  In the event of a bankruptcy proceeding initiated after the sale of the lien, there are no guarantees – the United States Bankruptcy Court judge will determine the amount, if any, the certificate holder will receive.

CAN TAX CERTIFICATES BE SOLD OR TRANSFERRED?

Tax certificates may be sold and/or assigned to another party.  Assignment forms are available upon request from the Tax Department (407) 742-4000 or on our website.  All tax certificate transfers MUST be recorded in the Tax Collector’s Main Office.  There is a fee for recording each assignment in the official records ($2.25).  In addition, the new owner will need to complete a W-9 form for reporting interest collected and subsequently disbursed to the certificate holder.  When an assigned certificate is eventually redeemed, the total accumulated interest from the original date of issuance is reported to the IRS under the present certificate holder’s social security/Federal tax ID number, regardless of the date of transfer. 

WHAT IS THE LIFE OF A TAX CERTIFICATE?

The life of a tax certificate is seven years from the date of issuance, which is the first day of the sale as advertised.  If the certificate holder does not apply for a tax deed within the seven years, the tax certificate is not redeemed, and no other administrative or legal proceeding has existed, the certificate is null and void and the certificate holder is out their initial investment (Florida Statute 197.482).   Please note that if the last day falls on a weekend it will become void on the last working day.

IS THIS A RISK FREE INVESTMENT?

Certificate buyers need to be aware that there are inherent risks involved with buying tax certificates, and those risks are borne solely by the certificate holder.  As with any investment, there is an element of risk.  The following are examples of possible risks to consider:

1. Corrections to the original taxes levied which would decrease the certificate value or cancel the certificate, the law provides for the portion in error to be refunded to the certificate holder with 8% interest or rate of interest bid, whichever is less, per annum, calculated monthly to the date of cancellation or correction.

2. If the assessed value drops significantly in subsequent tax years, it may cost more to bring the property to sale than the value gained by owning the property.

3. Upon notification that a property owner has filed bankruptcy, we are stayed from issuing tax certificates for the current year or processing a tax deed application.  No further action can be taken until the bankruptcy case is closed.  We are governed by the Bankruptcy Court as to final settlement of outstanding taxes or tax certificates.  For instance, the Bankruptcy Court can lower the interest rate and order payments to be made over a five-year period.  If you purchase a tax certificate and the property owner files bankruptcy, our office will file claim(s) with the Federal court on your behalf.  We do not, however, provide legal representation to a certificate holder.  The life of a tax certificate is extended for the length of time the property owner is in bankruptcy.

4. In addition, the Solders’ and Sailor Civil Relief Act limits penalty and interest not to exceed 6% per year and does not allow for a tax deed sale to occur while the person is on active duty in the military.  This means that if you purchase a certificate, the interest rate can be lowered to 6%, if the property owner qualifies under this act.  Certificate holders will receive notification of this action.

HOW CAN I APPLY FOR A TAX DEED AUCTION?

Only one certificate is necessary to bring property to sale for a tax deed.  If a certificate is not redeemed within two years from the date the taxes became delinquent; the certificate holder may apply for a tax deed, and bring the land to sale at a public auction.  Example: 2006 taxes are delinquent April 1, 2007; therefore, a tax deed application may be made after April 1, 2009.  Certificate holders who apply for a tax deed must redeem all other certificates, pay any current taxes for which a certificate has not been sold, and pay other fees as mandated by state law.  The Clerk’s Office will notify the applicant of the fees due for each application.  For further information on tax certificates, please contact Osceola County Tax Collector’s Office, 407-742-4000.

WHAT IS A TAX DEED SALE?

A tax deed sale is the sale of property at public auction for back taxes and fees associated with bringing the property to sale.  Florida Statutes provides that the Clerk of the Circuit Court is responsible for the administration of tax deed sales.

HOW DO I PURCHASE PROPERTY AT A TAX DEED SALE?

All properties are sold at the Osceola County Courthouse at a public auction after legal notice is published in a newspaper.  Anyone may bid on the property and it is sold to the highest bidder.  The Clerk of Courts Office must receive the total amount of bid and recording fees within 24 hours after the sale.  Payment must be made by cash, cashier’s check, or money order only.  Direct questions to Clerk of the Court at 407-742-3500.

HOW IS THE MINIMUM BID FIGURED?

The minimum bid is calculated from the following charges:

Tax Collector’s Application Fee --------------------------------------------- $75.00
Taxes and Interest -------------------------------------------------------------- Varies
*Title Search Fee ---------------------------------------------------------------- $125.00
*Clerk’s Statutory Fee ---------------------------------------------------------- $60.00
*Advertising Charge ------------------------------------------------------------ Varies
**Postage ------------------------------------------------------------------------- Varies
**Sheriff’s Fee (per person served) ---------------------------------------- $20.00
Additional Interest (per month, calculated on above total) -------------- 1.5%
½ of Assessed Value (only if homestead prop.) --------------------------- Varies

MINIMUM BID = TOTAL OF ABOVE FIGURES

*These figures are fixed fees for each property.
**These fees depend on the number of individuals to be notified.

The certificate holder is considered to have entered the minimum bid by virtue of making application for a tax deed.

IS THE OWNER OF THE PROPERTY SENT A NOTICE THAT THE PROPERTY IS BEING SOLD?

Florida Statute 197.522 requires the Clerk of the Circuit Court to send a notice to the owner of record and any lien holder of record.  The Tax Collector’s Office provides this information to the Clerk.

The owner is sent a warning notice that contains the date and time of the sale, by certified mail.   If the owner resides in the State of Florida, the sheriff of the county where the owner resides attempts service of a warning notice on the owner.

A Notice of Application for Tax Deed, which states the date and time of the sale and the amount to redeem the property, is mailed along with each warning notice.  The Notice of Application is published once each week for four consecutive weeks at weekly intervals in a newspaper selected as provided in Florida Statute 197.402.  No tax deed sale will be held until 30 days after the first publication of the notice.

HOW DOES THE BIDDING WORK?

To bid on the properties at the tax deed sale, you would need to be present at the sale or have someone present on your behalf.  All bids are made as verbal bids with the highest bidder being the successful bidder. 

WHAT HAPPENS IF I AM THE HIGHEST BIDDER?

For every property, that you are the successful bidder on, you will be required to post a $200.00 non-refundable cash deposit immediately following the sale.  The remainder of your bid will then be due by the prescribed period of time.  All payments must be made in cash, cashier’s check, certified check or money order. If you fail to pay the deposit or the balance of your bid, the Clerk of Courts Office reserves the right to refuse your future bids on any tax deed sales.

If the applicant is not the highest bidder, they will be reimbursed for the total amount paid at the time of the application plus 1½% interest per month (beginning the month after the tax deed application is made). 

Any difference between the highest bid and the amount paid in the application will be processed by the Clerk of the Courts Office as directed in Chapter 197.582 of the Florida Statutes.

CAN A TAX DEED SALE BE STOPPED?

According to Florida Statute 197.422, tax deed property may be redeemed anytime prior to the recording of the tax deed if all back taxes, fees, and accrued interest are paid to the Tax Collector’s Office.  If the tax deed file is redeemed prior to the start of the sale, the property will not be offered for sale.  This information will be updated to the sale list available on the internet and will be announced at the sale.  If the delinquent taxes are paid between the time of the sale and the issuance of the Tax Deed, the successful bidder will be notified and all funds paid will be refunded. 

DO I RECEIVE CLEAR TITLE TO THE PROPERTY?

Tax deed properties are sold on a “Buyer Beware” basis.  The Clerk of Circuit Court will issue a Tax Deed.  This document will transfer title to the successful bidder, but it is not a guarantee of clear title.  It is the buyer’s responsibility to determine whether any liens or encumbrances survive the issuance of the Tax Deed, whether additional taxes may be due, and if further legal action is necessary.

DO LIENS SURVIVE THE ISSUANCE OF A TAX DEED?

You should consult with an attorney.  Florida Statute 197.552 provides, in part, “ . . . except as specifically provided in this chapter, no right, interest, restriction, or other covenant will survive the issuance of a tax deed, except that lien of record held by a municipal or county governmental unit, when such lien is not satisfied as of the disbursement of proceeds of sale under the provisions of Florida Statute 197.582, will survive the issuance of a tax deed.

NOW THAT I HAVE A TAX DEED, WHAT MUST I DO?

There may be additional actions that are necessary in order to obtain a marketable title.  However, the Tax Collector’s Office nor the Clerk of Courts Office can answer this question.  You may wish to seek legal advice for further information on how to proceed.

 
WHAT HAPPENS WHEN THERE ARE NO BIDDERS AT THE COUNTY TAX DEED SALE?

If an individual or company started the tax deed application and there are no bids made, the property is considered to be sold to that certificate holder as stated in Florida Statute 197.542(1).  If the property was forced to auction by Osceola County and there are no bids, Osceola County will have the first 90 days to purchase the property.  If they choose not to purchase the property, it will then be placed on the List of Lands Available for Taxes and made available for the public to purchase.

WHAT ARE LANDS AVAILABLE FOR TAXES?

Osceola County holds tax certificates not sold to individuals.  The County may apply for tax deed two years after April 1st of the year of issuance of the certificate.  According to Florida Statutes, the county is only required to pay the applicable costs and fees.  If there are any individual-owned certificates, they are added to the tax deed file as part of the minimum bid.  Interest stops the month of application by the County.  In order to protect their investment, individual certificate holders are notified by the Clerk’s office of the impending sale.  If the tax deed file is redeemed or the property sold, the certificate holder is paid; if not, the property goes into “Lands Available for Taxes”; and the certificate holder is not paid until such time as the property is sold. 

THE FOLLOWING ARE SOME FAQ’S THAT ARE RECEIVED ABOUT TAX DEEDS:

Q: Where can I obtain a list of sale dates and properties being offered for sale and how do I know which properties have been removed from the sale?

A: The list of properties available for sale can be obtained from the Clerk of Circuit Courts’s website, www.osceolaclerk.com.   The Tax Collector will advise the Clerk’s Office of properties that need to be removed from the sale due to redemption or for other reasons.  As this information is received, the sale list available on the internet is updated.

Q: When and where are Tax Deed sales held?

A: Tax Deed sales are held throughout the year.  Information regarding upcoming sales and sales lists can be obtained from the Clerk’s website. Tax Deed sales are held at the Osceola County Courthouse, 2 Courthouse Square, Kissimmee, FL 34741.

Q: Where are Tax Deed sales advertised?

A: Notice of Tax Deed sales along with all the properties that will be offered for sale is published in The Orlando Sentinel.

Q: What information do I need to know about the property?

A: If you are interested in a property, it is YOUR responsibility to do the necessary research to determine the property’s address, value, or whether liens or other encumbrances exist.  The Clerk of Circuit Court’s Office does not announce this information at the sale.  Tax Deed files may be reviewed online.  You may also obtain information in the official records maintained by the Clerk of Circuit Courts (www.osceolaclerk.org), the Tax Collector’s website (www.osceolataxcollector.org), and the Property Appraiser’s website (www.property-appraiser.com).

Q: Do I need to register to bid?

A: Participants are not required to register prior to the sale. However, please remember $200 cash per property.

Q: Where can I find information about Tax Certificate Auctions and Tax Certificates?

A: Tax certificate information can be obtained from the Tax Collector’s Tax Department at 407-742-4000, or by viewing the Tax Collector’s website, www.osceolataxcollector.org