Paying property taxes may be an unpleasant chore for most people who own residential or commercial property, but those tax payments are what allow the city and county government to provide public services such as street repair, fire, police and emergency services. When property taxes are not paid on time, most state or county governments have the authority to sell either tax liens or tax deeds as a way to collect the money owed.
Understanding Tax Liens
Tax liens are sold to investors with the promise of interest or penalty fees as profit when the lien is paid back by the property owner. When tax deeds are sold, however, the ownership of the property itself is auctioned off to investors and the original property owners usually have no way to retake ownership.
In the state of California, tax liens are not sold. Instead, the state holds regular tax certificate sales to auction off property that has had delinquent taxes for five years or more. Winners of tax certificate sales receive the property deed within 30 days after the auction.
Search for Properties
Visit the Los Angeles County Property Treasurer and Tax Collector website (see Resources) to find tax deed sale property in Los Angeles County. To find properties in other California counties, visit the specific county website you're interested in.
Follow County Instructions
Follow the instructions listed for acquiring a list of currently available properties. Properties are listed for tax auction in specific local newspapers, and in some counties the lists are available for browsing online. In Los Angeles county you must buy an auction book, or visit the county treasurer's office during business hours to view the book. In Alameda county however, you can log into their online auction website to view the updated list of auction properties.
Inspect the Property
Visit each property you're interested in to verify the condition and listing accuracy. Take note of those properties you want to buy tax certificates for.
Fill Out the Paperwork
Fill out and submit the required bidder registration paperwork for each county you plan to buy tax lien certificates in. Generally a W-9 form is required for filing with the Internal Revenue Service (IRS), as is basic bidder registration forms. Each county may have slight differences in their requirements as well. Many California counties conduct their tax certificate auctions online. Alameda and Solano counties require you to register at Bid4Assets.com for example, and place a $5,000 deposit and pay a non-refundable $35 processing fee.
Make Your Bid at Auction
Attend the auction on the given date and time. Be sure to bring any required identification if the auction is in person. Online auctions require all paperwork and deposits to be submitted at least four days before the auction is scheduled to begin. Winning bidders can pay the auction balances with a cashier's check, wire transfer or electronic funds transfer.
Properties are sold & as is. California strongly recommends you visit and view potential properties in person before bidding on them at auction.
- Properties are sold "as is." California strongly recommends you visit and view potential properties in person before bidding on them at auction.
Kathy Burns-Millyard has been a professional writer since 1997. Originally specializing in business, technology, environment and health topics, Burns now focuses on home, garden and hobby interest articles. Her garden work has appeared on GardenGuides.com and other publications. She enjoys practicing Permaculture in her home garden near Tucson, Ariz.