Reference

Tax sale glossary

The terms you will run into at a tax sale, defined in plain English and linked to the guides that go deeper.

19 terms

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Bid-down-interest: A lien-sale auction format where bidders compete by accepting a lower interest rate rather than paying more. The auction starts at the statutory maximum and the rate is bid down; the lowest rate wins. Florida uses this method, starting at 18 percent.; Bidding methods explained→

County-held certificate: A Florida tax certificate that received no bid at the annual sale and was struck to the county at the full 18 percent. Any buyer can purchase it over the counter afterward at face value plus 1.5 percent per month plus a fee.; Over-the-counter tax liens→

Delinquency date: The date unpaid property taxes become delinquent, which starts the tax sale process. In Florida, taxes become delinquent on April 1 following the year they were assessed.; How Florida tax sales work→

Easement: A recorded legal right to use part of someone else’s land for a specific purpose, most often to cross it for access or utilities. A recorded access easement is what keeps an otherwise-landlocked parcel usable; the absence of one is a red flag when buying land at a tax sale.; Due diligence before a tax sale→
Escheat: The transfer of unclaimed property to the government. In Florida, a tax deed parcel that stays unsold on the Lands Available list escheats to the county three years after it was first offered for sale.

Homestead: A property that is the owner's primary residence, which often carries legal protections. In a Florida tax deed sale, a homestead parcel's opening bid adds one-half of its latest assessed value, which raises the floor price and cools investor demand.; How Florida tax sales work→

Lands available for taxes: A Florida list of parcels that received no bid at a tax deed sale. The county has a 90-day first-purchase right; after that any buyer can purchase the parcel from the Clerk. Unsold parcels escheat to the county after three years.; Over-the-counter tax liens→
Legal access (landlocked): A parcel has legal access if it touches a public road or has a recorded easement to reach one. A parcel with neither is landlocked: you have no legal right to cross a neighbor’s land to reach it, which can cut its value to almost nothing. Checking access is the first and most important due-diligence step at a tax deed sale.; Due diligence before a tax sale→

Marketable title: Title clean and clear enough that a normal buyer will accept it and a title company will insure it. A tax deed does not convey marketable title on its own, which is why deed buyers usually need a quiet title action before they can resell or insure the property. It does not mean you cannot own the parcel, only that clearing the title takes an extra step.; Due diligence before a tax sale→

Over-the-counter (OTC): The purchase of certificates or parcels that went unsold at auction, directly from the county at a fixed price with no bidding. In Florida, unsold certificates become county-held certificates at 18 percent, and unsold deed parcels go on the Lands Available list.; Over-the-counter tax liens→

Premium bid: The standard highest-bidder-wins auction format used at most tax deed sales. Bidders push the price up, and the top bid takes the property. Discipline means setting a maximum from real due diligence and not chasing past it.; Bidding methods explained→

Quiet title action: A lawsuit that establishes clear, marketable title to a property. Tax deed buyers often need one because a tax deed alone is not insurable title. It takes months and costs money, and it should be budgeted into any deed purchase.; Due diligence before a tax sale→

Redeemable deed: A hybrid instrument where the buyer purchases the deed at auction, but the former owner has a set window to redeem by paying the bid plus a penalty. Redeem, and the buyer earns the penalty; do not, and the buyer keeps the property. Georgia and Texas are examples.; Tax lien vs tax deed→
Redemption: When a delinquent owner reclaims their property by paying the overdue taxes plus interest and penalties. Redemption pays off a lien certificate with interest, or, in a redeemable deed state, pays back the buyer with a penalty.; Redemption periods explained→
Redemption period: The window during which an owner can redeem before an investor can take further action. It is set by state law and ranges from months to years. It determines your timeline and, for lien buyers, how long capital is tied up.; Redemption periods explained→

Self-directed IRA (SDIRA): A retirement account held at a specialized custodian that permits alternative assets, including tax lien certificates. It lets lien interest grow tax-advantaged, subject to strict prohibited-transaction rules.; Buying tax liens in an IRA→
Struck to the county: What happens to a tax certificate that receives no bid at auction: it is issued to the county itself at the maximum statutory rate, becoming a county-held certificate available for over-the-counter purchase.

Tax deed: The instrument that conveys a property sold at a tax deed auction. Winning a tax deed can give you ownership, but it does not come with clean, insurable title, so a quiet title action is often needed before resale.; Due diligence before a tax sale→
Tax lien certificate: A document representing unpaid property taxes that a county sells to an investor. The investor pays the back taxes and earns interest until the owner redeems. It is an income investment, secured by the property, that rarely turns into ownership.; Tax lien vs tax deed→

Open a county to watch these concepts play out in a real sale calendar and rule set.