Real Estate Tax
Delinquent Property Tax Information
Property taxes become due November 1, and are delinquent if not paid by April 1 of the following year at which time 3% interest and advertising cost are added.
The amount due on delinquent payments is determined by date received, not by postmark. Failure to receive a tax bill on your property will not relieve you from paying taxes or subsequent penalties which are imposed when taxes become delinquent on April 1. Partial payments are not accepted for delinquent taxes.
On or before June 1 the Tax Collector must conduct a tax certificate sale auction on all unpaid property taxes as required by Florida Statutes Chapter 197.
The tax deed foreclosure process can begin two years after taxes become delinquent.
Property taxes become delinquent if not paid by April 1 of the following year. During the month of May, the Tax Collector is required to advertise a listing of all delinquent property taxes in the newspaper and online. On the last Saturday of May, the tax collector’s office will conduct an annual Tax Certificate Sale to collect the preceding year’s unpaid taxes and associated fees.
A tax certificate is a first lien created when a third party (tax certificate holder or investor) pays the outstanding delinquent taxes on a property. A tax certificate is an interest bearing “lien” for unpaid real estate and non-ad valorem assessments. They are a first lien against property and supersede governmental liens. Tax certificates convey no property rights.
The tax certificate’s face amount consists of the sum of the following: delinquent real estate tax (unpaid amount), interest (3% on the delinquent amount), Tax Collector’s commission (5% on the delinquent amount) and the newspaper’s advertising charge (& sale costs or other costs). The interest on a tax certificate will vary up to 18% and begins accruing June 1. Simple interest accrues on a monthly basis. The life of the certificate is 7 years.
To pay off a tax certificate, the property owner must pay delinquent taxes, accrued interest and advertising costs. Upon redemption, the Tax Collector’s office reimburses the tax certificate holder/investor all monies due.
If the property owner fails to pay delinquent taxes within two years from the date of delinquency, the tax certificate holder/ investor may file a tax deed application. A tax deed application may result in a Tax Deed Foreclosure.
A tax certificate does not convey any property rights. Purchasing a tax certificate is simply an investment.
Tax Deed Overview for Property Owners
A tax deed application is the action initiated by a tax certificate holder. The tax deed application is a legal document that begins the process wherein the Clerk of the Circuit Court sells the property to the highest bidder at public auction. This process is known as a Tax Deed Foreclosure.
Property owners have 2 years from the date taxes become delinquent before they risk loss of the property. As stated in Florida Statute 197.502, after the 2 year period has elapsed and taxes remain unpaid, the certificate holder may file a tax deed application with the Tax Collector’s office.
The property owner may retain the property by redeeming the tax deed application any time before the property is sold at public auction. In other words, if delinquent property taxes are paid off while property is in a tax deed application status, the applicant is reimbursed for their total investment, accrued interest and the tax deed sale process is stopped.
As part of the Tax Deed process, the Clerk of the Circuit Court sets the sale date and notifies the applicant of the additional costs associated with the sale, which the applicant must pay. Please note, the tax deed foreclosure process can take months to complete due to statutory requirements governing tax deed sales.
Under the Bankruptcy Code, a tax lien for unpaid property tax is classified as a secured claim, meaning the debt is secured by the value of your property. In a Chapter 7 bankruptcy, secured claims are paid first through the sale of your assets, with property tax liens often taking priority over all other debt. Most tax debts cannot be eliminated in a Chapter 7 bankruptcy and must be repaid in a Chapter 13 bankruptcy. Generally, if you do not surrender your property to the bankruptcy court or trustee, you are still responsible for unpaid property taxes.
Investors may buy the tax certificates by paying all delinquent tax and fees due. If your tax certificate is sold, and bankruptcy is filed after a tax certificate sale you are required to make payments to the investor (via trustee) for unpaid property taxes. The investor can legally foreclose on your property if you fail to make payments.
The Tax Collector is prohibited from attempting to collect your tax debt during bankruptcy proceedings as a result of the automatic stay. If you include the property in the bankruptcy estate, the Tax Collector or an owner of your tax certificate(s) will look to the court-appointed bankruptcy trustee (Chapter 7) or to your repayment plan (Chapter 13) for collection of your debt. If your property has no equity and the trustee abandons it, the Tax Collector looks to the property itself for collection of the debt, in accordance with Florida Statutes.
Filing bankruptcy may stop the tax deed sale of your property.