Tax Lien Certificates
Posted in Tax Credit Tax Lien Certificates

Investing In Tax Lien Certificates

All About Investing In Tax Lien Certificates

If you want to receive 15% to 50% returns on investment guaranteed by the government, then investing in tax lien certificates is the best option available. Such documents are offered in many states and counties of the U.S., but tax lien sales may be different from one country to another and even from one county to another within a state.

In a majority of the tax lien auctions, the tax lien properties are read off by the auctioneer in the order they are listed, and the property price is bid up. Whereas there are some counties where the auction takes place online like California and Florida. In such sales, you’ve got to register online and put up a deposit.

While in others, the interest rate is constant and biding over the price of the property is done. Overbid or premium is generally referred to the amount bid up from the amount due.

There are various states in which you may receive the interest on the premium paid for tax liens while some do not.

In some of the states, what is bid down is the percent ownership interest in the property in case the lien is foreclosed. The individual who is ready to accept the lowest percent ownership interest in the park will be awarded the tax lien certificate.

In simple words, the tax lien certificate is a note issued by the county or the municipality on the properties that are in arrears with their property tax. Government tax lien certificates are also auctioned many times. These are being sold at auction by the individual counties, municipalities, and states that issue them.

This amount is usually state mandated. However, there is some risk involved with the purchase of the tax lien certificates. If the tax lien certificates are being purchased under the control of Federal Deposit Insurance Corporation or if the owner files bankruptcy then you may suffer a possible loss of your investment. Also in case, the purchase is affected by the drug enforcement administration, then even the same result will occur.

Therefore, proper title and bankruptcy research should be undertaken otherwise your lien tax may end up worthless. Many states have different laws regarding government tax lien certificates and hence contain different tax forms. States having the particular law regarding possession of tax lien property may be different from another.

So this is all about investing in tax lien certificates. It certainly has both positives and negatives of is own. Decide what works best for your interests.