Thursday, August 18, 2005

Tax liens sale for 2004 totals $1.2 million; Aug. 25 is deadline to redeem 2002 taxes

Staff Writer

August 26 at 5 p.m. will be the last opportunity for real property owners to pay 2004 taxes before their properties go to the August 29 tax lien sale, according to Betty Byrd.

Last summer $991,000 was collected in 2003 taxes through the sale and 2193 parcels were sold, she said.

Byrd said 2,577 parcels will go on the auction block to collect tax liens in August, minus a few parcels on which taxes will be paid prior to the sale.

The tax auction takes place in the Youth Court Room at 103B Market Street beginning Monday, Aug. 29 , at 8:30 a.m. until 4:30 p.m. The tax auction will continue daily until all taxes are sold, Byrd said.

The outstanding 2004 taxes collected this summer totals $1.2 million with $768,000 going to Marshall County coffers, $71,000 going to the cities of Holly Springs, Potts Camp and Byhalia and $358,000 in school money that will go to Marshall County School and Holly Springs School districts.

Interest on delinquent 2004 taxes began at 1 percent Feb. 1, 2005. In the month of August interest on taxes owed goes to 7 percent plus penalties of $1.50 for each week the parcel is advertised in the local paper. The interest and penalties are mandated by state law.

Once the tax sale is completed and collections balanced, property owners may redeem their taxes at the chancery clerk’s office. They have two years after the date of sale to redeem their properties but must pay both tax owed, interest and any penalties that accrued, Byrd said.

“While parcels are listed at chancery, interest and penalties continue to accrue,” she said.

Byrd said over 100 tax buyers, some from as far away as Washington state, purchased tax liens last year. It is becoming a lucrative investment strategy for individuals and companies, she said.

“Buyers are people who are not interested in the property itself, but in the interest they earn when the owner redeems his taxes,” Byrd said. “Interest earned on a two-year redemption can earn the buyer up to 36 percent return on the investment.”

In recent years bidders have come to the tax auction, but not always so, Byrd said. She said television infomercials are teaching people how to buy tax liens.

“Years ago there was not that much interest,” Byrd said. “The tax sale was a formality. Mr. Fant and I would go over to the Court Room and read the headings with no bidders there and turn around and go back to the office. All that money was uncollected until the redemption period started at the Chancery Clerk’s office. Taxes would trickle in over the two-year redemption period.”

Byrd said companies are now sending bidders to tax auctions in counties across the nation. Sometimes bidders will overbid (bid more for the tax lien than tax owed). Buyers who overbid do not get the overbid amount reimbursed if the property owner redeems their tax within two years, she said.

Chancery Clerk Chuck Thomas said a buyer can overbid up to 6 percent of the tax owed on a property. Owners do not have to pay the amount overbid when they redeem their property. The dollars overbid go to the county, he said.

Byrd said the tax lien auction is the hardest part of her job.

“But I have no choice,” she said. “It’s mandated by state statute.”

“As cold and hard as this sounds, the tax lien auction allows cities, counties and school districts to get their money to operate on and the owners get two years to redeem their property,” she said.

Thomas cautioned owners who have not redeemed their 2002 property taxes at his office that August 25 is the deadline to do so.

“This month is critical,” he said. “If they don’t redeem the 2002 taxes they stand a good chance of losing their property. It is almost impossible to get the property back unless the tax purchaser is agreeable to negotiate it back to them for taxes and interests.”

Thomas said the chancery clerk’s office cannot accept checks to redeem delinquent taxes.

“Due to the importance of these taxes, we can only accept cash, money order or a cashier’s check,” he said. “Returned checks are just impossible to handle at this point in the redemption process.”

Thomas said tax sale buyers usually purchase the taxes as an investment and are not interested in the property itself.

“But there are some serious buyers who won’t let them have it back,” he said.

A tax buyer can request a tax deed after August 29 for taxes purchased in 2002, he said. Once that is done the property owner is “only a step away from losing his property,” he said.

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