This certificate will detail the individual taxing authorities for a property, including taxing jurisdiction, exemption amount, and tax rate. It also provides a comprehensive description of the assessed value of the property and taxes imposed on a property. It will include property assessment details, and a summary of current tax year amounts owed with and without exemptions.
The closing process differs from one jurisdiction to the next, but some information is consistently requested as part of the title search on the property. A Tax Certificate is basically a tax report on a property. We offer three different types of Tax Certificates:
Basic Tax Certificate
A Basic Tax Certificate is typically ordered when refinancing a home loan.
PropLogix is trusted by some of the largest and most respected title underwriters and title companies in the nation. Close with confidence, control costs per file, maintain employee counts, save time, and optimize your internal title production by utilizing our team of specialized tax experts.
What is the difference between a Tax Certificate and a Tax Deed Certificate?
A Tax Certificate is a type of property tax report and should not be confused with a Tax Deed Certificate. A Tax Deed Certificate is what is issued to the highest bidder at a tax sale or tax deed sale that is a result of chronic delinquent taxes.
What Happens If You Don’t Pay Your Property Taxes?
Local governments rely heavily on property taxes to fund public services, so when homeowners don’t pay, the municipality will take action to recoup the money. All states have laws that allow the local government to sell a home through a tax sale process.
A local government has few different approaches to settle delinquent taxes:
A lawsuit or Tax Suit is filed against the property owner, which may result in a settlement to repay the delinquent taxes via an installment plan, bankruptcy, foreclosure, or a tax sale.
The tax lien is sold at auction as a tax lien certificate. The bidder buys the right to collect the tax debt with interest, not the house.
The title to the house is sold at auction with all other liens against the property attached.
If you have a delinquent amount that meets a certain threshold on a homesteaded property, the tax collector will issue the certificate to the county instead of conducting a public auction.
The County’s Tax Collector may ask the local court to schedule a judicial sale, which wipes out any taxes, liens, or mortgages attached to the property.
A tax sale is usually the final step and last resort to settle the debt after working with the homeowner for some time.
Tax Sale Redemption
Even after a tax lien sale of a property, there is a chance to buy back the deed of the property with a process called “redeeming” the property. Typically, the redemption process involves paying:
The bid amount paid by the investor
Any fees incurred for recording the new deed
Any liens remaining on the property after the sale
Other fees, costs, and interest (rates can go as high as 18% on the debt)
A redemption premium
Each state has different processes and deadlines for redemption, so you’ll want to be sure to check with your county tax collector’s office for more details. In some cases, the investor may initiate a foreclosure in as little as six months after the tax lien sale, and the added fees and interest can make paying off the debt after the sale nearly impossible.
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