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Officials Prepare To Sell Tax Certificates

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By JULIA FERRANTE

The Tampa Tribune

Published: May 26, 2008

More property owners than ever failed to pay their tax bills this year, Pasco County officials are finding, as they prepare for their annual tax certificate sale.

As of last week, $28 million in back taxes was owed on 14,939 parcels, Tax Collector Mike Olson said. Last year, there were 10,873 delinquent tax bills worth a little less than $18 million. The deadline to pay was April 1.

Olson predicts the county will collect on most of those debts at an Internet auction that closes Thursday.

"As long as there are investors, we will get back most of it," he said.

The yearly tax certificate auction is Florida's way of ensuring counties get money due to them. According to state law, if a property owner does not pay taxes before April 1, the county on or before June 1 may auction the right to pay the tax bill.

Investors in a sense hold loans for delinquent taxpayers in exchange for interest, Olson said. The bidding starts at 18 percent and goes down from there. Bid winners get a minimum of 5 percent interest, although bidding can go lower than that.

Anyone may participate. Those without Internet access may arrange to use a county computer through the tax collector's office.

Tax certificate sales are not land sales but sales of a lien plus interest and other costs. The lien does not entitle the buyer to enter or own the property.
Property owners who have delinquent tax bills have two years to pay the debt before their property is put up for sale to the highest bidder, Olson said.

Not all tax deeds can be sold. If the owner has filed for bankruptcy or has a homestead exemption and taxes of less than $100, the government can't collect. County properties are exempted, as is a parcel with a value being contested in court.

Last year was the first year Pasco conducted the tax certificate sale via the Internet. Olson said the online system is more efficient than the traditional "live sale," and attracts many more bidders.

"The chances are a lot slimmer" for bidders, Olson said. "But how many people can you put in a room, and when it goes to a quarter-percent, and 100 people in a room put up their paddle, there is no way humanly possible to tell who did it first."
Property owners can reclaim the tax deed up until the time the clerk signs it. If the tax certificate goes to a bidder, the homeowner pays the tax collector, who in turn pays the investor.

Investors take a risk in buying tax certificates, Olson said. Sometimes, a developer will divide a large parcel and stop paying taxes on a portion he considers worthless, such as a swamp. After two years of tax delinquency, if the developer still has not paid, the land goes up for sale. If no one else bids, the property reverts to the tax certificate holder.

"It's an investment that should be for people who know what they are doing," Olson said.

Investors must put down 10 percent after winning a bid on property. If they fail to pay the taxes in their entirety when they are due, the county keeps the deposit and puts the property back up for sale, Olson said.

For information about Pasco's tax sales, go to www. bidpasco.com or call the tax collector's office at (352) 521-4360, (727) 847-8165 or (813) 235-6020.

Reporter Julia Ferrante can be reached at (813) 948-4220 or jferrante@tampatrib.com.

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