The tax sales in Indiana are very unique. As I’m sure you have noticed by now no two states are identical in how they operate their tax lien and/or tax deed sales. Whether you have decided to invest in liens or deeds, Indiana can satisfy the needs of either investment type. The counties have permission to hold three different types of tax sales:
Tax Lien Sale
Commissioners Certificate Sale
Tax Deed Sale
The first and most standard sale is the tax lien sale, which are annual and typically held in autumn. This is when tax liens placed against properties are auctioned off live or online in a premium bid fashion. The redemption period is one year from the date of sale; the interest is 10% on the minimum bid if redeemed within the first 6 months, and 15% on the minimum bid if redeemed after 6 months but before 1 year. What comes as a pleasant surprise is that a tax certificate purchaser will also be reimbursed their overbid amount, plus 5% interest per annum on that total.
If a property is redeemed then the certificate owner will be notified and needs to surrender the tax sale certificate to the Auditor’s office in order to receive payment. You are encouraged to pay subsequent taxes and special assessments as you can receive reimbursement for those costs with an interest rate of 5%.
As a lien buyer you are not the owner of the property. This means you cannot take possession of the property and you are not responsible for anything that happens to, or on, the property during the redemption period. You can apply for a tax deed “After the expiration of the redemption period but not later than three months after the expiration of the period of redemption, the lien buyer or its assignee may file a verified petition with the court having jurisdiction over the tax sale for an order directing the county auditor to issue a tax deed to the lien buyer.” This is in addition to other procedures mandated by the state. I strongly advise anyone to hire an attorney to assist in the legal process required to receive a tax deed.
Please read my next article, as I will dive into explaining commissioner tax sales and tax deed sale. Note that today’s article is by no means comprehensive; take the time to conduct extensive research on Indiana’s tax sale rules and procedures before attending later this year.