Tax lien yield calculator

How Florida actually accrues the interest

The calculator uses Florida’s statutory mechanics, verified against the statute and official county Tax Collector guidance:

• Simple interest, charged monthly. The monthly rate is the annual bid rate divided by 12, counted from the certificate sale, and any fraction of a month counts as a whole month (F.S. 197.172(4)). A certificate redeemed at six months and one day is charged seven months.
• The 5% floor is flat, on the face amount. At redemption you receive the accrued interest or an absolute 5% of face, whichever is greater, no matter how short the hold; certificates bid at 0% earn nothing (F.S. 197.472(2)).
• Bids run 18% down in quarter-point steps. Certificates nobody buys are struck to the county at the full 18% and accrue the same way (1.5% per month, any fraction counting as a month) until someone buys them (F.S. 197.432, 197.4725).
• The $6.25 redemption fee is not yours. The owner pays it at redemption, but the Tax Collector keeps it, so it never touches your yield (F.S. 197.472(3)).

Other states use different machinery entirely: flat redemption premiums in Georgia and Texas, per-six-month penalty steps in Illinois. The state selector will grow as those states go live.

Why the bid rate is not your yield

In most lien states the interest rate is bid down at auction: the statutory maximum is the starting ceiling, and bidders compete by accepting a lower rate. So the advertised rate is rarely what you earn. A state minimum floor can protect the yield, especially when a certificate redeems quickly. See realistic tax lien returns for the full picture, and check your state's exact rate and floor before you bid.

Fees also eat into the number: auction platforms, redemption processing, and, if you buy through a self-directed IRA, custodian charges that often run per certificate. On a small certificate a flat fee can take a visible bite out of the yield this page computes, so subtract your real costs. Buying in an IRA has its own mechanics; see buying tax liens in an IRA.

Frequently asked questions

What return do tax lien certificates actually pay?

Less than the advertised statutory maximum, in most cases. The maximum is a ceiling, and competitive bidding usually drives the winning rate well below it; how far below depends on the state and on how many bidders show up. Our guide to realistic tax lien returns, linked on this page, walks through what that does to actual yields. A state minimum floor can lift the yield on a fast redemption.

How does a minimum penalty floor work?

Some states guarantee a minimum return on a redeemed certificate regardless of how quickly it is paid off. Florida, for example, guarantees a 5 percent minimum, except on a 0 percent bid. If your accrued interest at the bid rate is less than the floor, you receive the floor, which can make the annualized yield on an early redemption quite high.

Does an early redemption help or hurt my yield?

It depends on the floor. Without a minimum, earlier redemption means less accrued interest and a lower dollar return. With a minimum floor, an early redemption can produce a high annualized yield because you earn the floor over a short period.

What if the owner never redeems?

Nothing returns automatically. Once the redemption window runs (in Florida, roughly 2 years), the certificate holder must apply for a tax deed and fund the application costs to force a sale. If no one ever acts, a Florida certificate expires worthless after 7 years. The redemption deadline calculator on this site maps those dates for a specific certificate.