You may have noticed that some of our issues this month have held pages and pages of dense listings filled with names, parcel numbers and dollar amounts. This is the report of this year’s Marion County tax lien certificates, which reflect unpaid taxes that were due Nov. 1, 2023, and became delinquent April 1, 2024. Each year the county is required to notify the public, publish this information and hold a tax certificate lien sale in which investors can buy the tax certificates and earn interest on the investment.
Here’s how the process works:
Property taxes are due Nov. 1 of each year and become delinquent April 1 of the following year. For many property owners, especially those with mortgages on the property, taxes are part of the principal/interest/taxes/insurance total payment made to the mortgage company. You pay monthly and forget it.
But many property owners don’t pay that way and, due to death of the property owner, moving, a private sale and other situations, tax payments might be overlooked and forgotten. It’s uncommon, but there are times when an owner is surprised about forgetting to pay taxes.
“It happens more than we would like,” said Craig Silverman, the director of tax services with Marion County. “If you’ve moved and forgotten about letting the tax collector know, we’ll mail the tax notice to your old address. People just don’t think about that when moving. Or a spouse dies and the remaining beneficiaries don’t know about an extra lot,” and those taxes become due.
In those situations, the county wants its money. So, they sell tax certificate liens that allow investors to purchase the right to the tax payment plus interest. The certificates are required to be advertised and if the taxes are not paid by May 31, then the certificate lien goes to the sale.
Silverman has been with the Marion County Tax Collector’s Office for 18 years and has seen enormous changes in property values and the effects of the 2009 recession and COVID-19 on county taxes.
“Those were not pretty years,” Silverman said. “Property values are determined on Jan. 1, but in the downturn, the property drops in value by the end of the year. I watched that and the comeback, and now we’re on the rise again.”
To be clear, a tax certificate lien is not the same as taking ownership of the property. Instead, think of it as the right to earn interest on that cash investment(s). That tax certificate dollar amount reflects all of the unpaid real estate taxes, assessments, including penalties, advertising costs and fees. A tax certificate is a first position lien (senior lien) on the property. Usually, the owner must pay off the tax certificate in order to sell or re-finance that property.
Silverman’s records show that for the past five years, in general, about 20% of those parcels advertised do get paid; about 80% end up going into the sale.
Tax Certificate Liens by Year
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| # Parcels certified to collect | 276,011 | 272,113 | 270,781 | 268,624 | 268,148 |
| # Accounts advertised/unpaid current year | 24,858 | 25,275 | 24,890 | 28,787 | 27,574 |
| # Certificates offered+ | 18,992 | 20,158 | 20,277 | 23,347 | 24,024 |
| Face amount of certificates sold* | $16,916,385 | $16,159,416 | $13,567,010 | $15,566,643 | $13,768,126 |
+ This figure reflects the number of parcels paid by owners before the lien went to sale.
* This figure reflects the general increase in property values in Marion County since 2019 and the increase in the number of parcels taxed and new construction values.
Marion County upgraded to the current online bidding system in 2005 when Tax Collector George Albright pushed for a more modern system.
Investor opportunities
When a property owner becomes delinquent on their property taxes the county issues a tax certificate for the owed amount.
“It’s a myriad of real estate investors, individuals and there are lots of companies that do this,” Silverman said. “If they are individuals, most are formed into some sort of corporation, LLC, something to provide liability shielding. Most are investors.”
And some investors bid in multiple counties, not just here.
The county gets some revenue on fees for each certificate, the investor gets the interest and the county gets the tax amount plus the fees for processing.
Silverman assured people that missing taxes will not result in the immediate loss of a property.
Any time before a tax deed is sold, the property owner can pay off the taxes, penalties and interest” and the tax lien is cleared. It takes two years after a delinquency date before a parcel can be put up for auction, he said.
There are investors who are attracted to these certificates because they earn interest. When the owner finally remembers to pay the taxes they must pay the money owed to the Tax Collector’s Office, which includes all of the accrued interest owed to the certificate investor. The key point to take away here is that a tax certificate investor is entitled to earn interest in the investment but has no ownership interest in the property.
Tax Collector’s Office can help
Innocent mistakes happen, such as a check with numbers transposed, for example, “but I can fix that problem in 90 seconds with some contact info,” Silverman said.
“We can help them if they’ll call us. A payment with contact information—a phone number, an email address—will let us get in touch if needed. If I could pick up the phone and let you know the check is $70 short or whatever, that would help people out. If not, I have to send that check back.”
And that delays the entire process and fees will start to add up.
“We will go out of our way to try and solve a problem like that,” Silverman said. “But if there’s no way for me to find you, there’s very little I can do.”
The call center gets a couple hundred thousand calls per year with a rotating staff of about eight county employees answering phones.
And, at times, owners or heirs just let the tax lien go. Sometimes probate costs more than the taxes due, and remaining heirs don’t bother to pay. So, the parcel and tax certificate may go to a tax deed sale.
Some Definitions
Tax certificate: The tax certificate represents the outstanding taxes on the property and includes those taxes, any assessments, including penalties, advertising costs and fees. A tax certificate is a first position lien (senior lien) on the property. A tax certificate holder has no ownership interest in the property.
Tax certificate lien sale: The county issues the tax certificate(s) to investors as a method to recoup those revenues. Interest accrues at a specific rate over a specified course of time until the taxes (lien) are paid.
Tax deed sale: A tax deed sale forces the property up for sale at a public auction and the property is sold to the highest bidder. Anyone may participate in the auction.
For more detailed information, a calendar of specific deadlines and a FAQs page, visit:
