What is a tax certificate?
A tax certificate is a first lien against real estate (not the owner) and becomes the basis upon which a tax deed application is filed. The tax certificate sale is NOT a sale of real property, nor does a tax certificate give the certificate holder a direct means to acquire a property. According to Florida Statute 197.432 (13), "The holder of a tax certificate may not directly, through an agent, or otherwise initiate contact with the owner of property upon which he or she holds a tax certificate to encourage or demand payment until 2 years after April 1 of the year of issuance of the tax certificate."
It is your sole responsibility to research any tax lien certificates that you intend to buy. You can see additional property and tax information for any particular certificate by clicking on the Advertised Number. Research any advertised items carefully before submitting bids. There are potential risks associated with tax certificate purchases. All purchases in the tax certificate sale are final.
When does the tax certificate sale take place?
The sale opens in early to mid May and starts to close on or before June 1.
In early to mid-May each year:
- Items for sale are advertised (in a local newspaper and on the auction web site)
- Bidders can begin to register for the sale (submit W-9 forms, pay deposits, get bidder numbers)
- Bidders can begin to submit bids
Starting on, or before, June 1:
- Bid submission ends
- Sale results are generated
For exact dates, please see the Auction Schedule. All activity related to registration, bidding, and certificate awards takes place on the auction web site.
How do I register for the sale?
All bidders who wish to participate in the sale must perform the following steps on the auction web site:
- Obtain a User ID and password for the web site by clicking the "Sign In" link at the top left of the page, then clicking the "Create A User" button and completing the required form
- Submit an IRS W-9 Form
- Submit information necessary to process redemption payments by ACH
- Set a budget amount (the most you are willing to spend in the sale)
- Pay a deposit of at least 10% of your anticipated purchases. Deposits will only be accepted via ACH.
- Please note that you can only submit or modify your W-9, or make a security deposit while a sale is open. You will be assigned a bidder number after you successfully submit your W-9.
Can I participate as a non-US bidder?
The Tax Collector will only accept bids from US persons who are qualified to complete an IRS W-9 form and provide a valid US TIN.
How do I submit my bids?
You can submit your bids on the Bid page individually, as a group (using a saved list), or via a file upload. You must complete all the registration steps before you are allowed to submit bids.
How do I pay for certificate purchases?
Payment must be made by ACH. The balance due for your purchases will be automatically debited from the bank account you designated as your "Final Payment Account" at the designated Final Payment Deadline. If you wish to manually make your payment prior to the Final Payment Deadline, please go to the "Payments and Budget" page under "My Account" and click "Pay for Certificates". The button is activated once the last batch in the sale closes and any final data updates are complete. The deadline to pay is listed on the Auction Schedule. If your final payment is returned as invalid for any reason, you may forfeit your security deposit and certificate purchases.
What is an ACH debit?
An ACH debit is an electronic payment from your checking or savings account. When you enter your bank account information and submit payment on the auction web site, you are authorizing the tax collector to debit your account for the amount you indicated. All payments are sent for processing immediately. Additional information is available on the page where you authorize payment.
Funds must be drawn from a US financial institution. Some types of money market, brokerage, and/or trust accounts cannot accept ACH debits. Please check with your financial institution prior to initiating payment on the web site.
THE TAX CERTIFICATE SALE
What is the auction process?
Certificates are sold in the order advertised. Bidding begins at 18 percent (the maximum rate) and bids down in decrements of one quarter of one percent. Each certificate is sold individually to the bidder offering the lowest interest rate. In the case of a tie at the lowest rate, the winner will be selected using a random number generator in the auction software. Items that receive no bids are "struck" to the county and become county-held certificates. Bids are accepted at 0.00% (zero), but certificates awarded at this rate WILL NOT accrue interest.
Is there a cost to participate?
Registration on the web site is free. You only need to make payment for a refundable security deposit, and to pay the balance due for any certificate purchases.
What is a batch?
A batch is a subgroup of the list of auction items. The list is divided into batches to make the bidding process more efficient and enable participants to manage their bids and budgets.
Do I have to bid on all the items in a batch?
NO. Each tax certificate in each batch is auctioned independently of every other tax certificate.
What happens to my security deposit if I don't win any certificates?
The Tax Collector will issue refunds approximately two weeks after the close of the sale. Refunds of ACH payments will be made electronically to the account you used to submit the deposit. Refunds of offline payments (if accepted by the tax collector) will be processed by check or wire transfer. You will receive an email confirmation when the refund is initiated.
Will the Tax Collector send me a paper certificate or list of certificates after the sale?
No, the Tax Collector does not issue paper certificates or lists of purchases after the sale. To review and download a list of your winning bids:
- Log in to the auction web site
- Enter the relevant tax certificate sale
- Click on the Results tab
- Select "All Certificates" from the Certificate Lists menu
- Select "All Batches" from the Batches menu
- Select your buyer number from the Bidder menu
- Select "Winning Bids" from the Results menu
- Check "Hide Removed Certificates"
After completing these steps, you will see a list of your purchases. You can download the list in Excel, or comma-separated values format (CSV), by clicking the icons on the right-hand side of the page above the list of certificates.
USING THE AUCTION SITE
I forgot my password. What should I do?
Click Forgot your password on the home page. Answer a few questions and the system will send you a temporary password via email.
I forgot my User ID. What should I do?
Click "Forgot your User ID?" on the Sign In page. Answer a few questions and the system will send your User ID via email.
What is direct bidding?
If you submit a bid for a certificate in a sale where the bidding format is Direct Bidding, and your bid is the lowest rate submitted when the batch closes (and you have a sufficient budget amount), you will be awarded the certificate at the rate you bid. Because some Florida tax certificate sales use different bidding formats, it is important to note that this differs from sales that utilize Proxy Bidding, where the low bidder is awarded at 0.25% below the next best bid if he or she submits a rate above 0.00%.
Does my budget amount limit the number of bids I can submit?
No. You can submit an unlimited number of bids regardless of your budget amount. However, you will not be awarded an item if the award would cause the value of your purchases to exceed your budget amount.
Is my budget amount automatically 10x my deposit amount?
No. The maximum allowable budget you can set is 10x your deposit amount, but you have to enter what you want your budget to be. You can modify your budget any time before the end of the sale, as long as you have at least 10% of that amount submitted as your deposit.
Where can I find sale results?
You can see results by logging in to the auction web site, entering the auction, and clicking on the Results tab in the upper right-hand part of the page. Clicking on the winning bid for any certificate will display a list of all submitted bids in a new window.
What equipment or software do I need to be able to participate?
Many people choose one of the following freely available browsers:
If I have a question about how to use the web site, who do I contact?
How do I receive redemption funds?
When a certificate has been redeemed, the certificate holder is entitled to the face value plus whatever interest the certificate has earned. Certificates are redeemed when the owner, title company or mortgage company pays the outstanding taxes, or when the holder of a certificate on the same parcel (from a different tax year) redeems it as part of a tax deed Application. Redemption proceeds are remitted weekly to certificate holders by the Tax Collector. The certificate holder is never paid directly unless it is from a Bankruptcy Trustee. If that happens, you must notify the Tax Collector when you are paid in full and request that the certificate be canceled.
Can I pay the taxes and own the property?
NO. You have not purchased property. A tax certificate purchase does not convey any property rights or ownership to the certificate holder.
Can an interest rate be changed after the sale?
The following may affect the interest rate:
- No interest is earned on certificates issued and then redeemed in the month of May.
- For all certificates, except those bid at 0% or issued and redeemed in May, the minimum interest you will get at the time of redemption will be 5%, even if the interest earned to date is less.
- If a certificate gets canceled or reduced, the interest earned will be 8% per year, simple interest, or the rate of interest bid at the tax certificate sale, whichever is less, on the canceled or reduced amount.
- Bankruptcy and other court rulings
Why would a certificate be canceled or reduced?
A certificate could be canceled or reduced for various reasons such as to correct errors, omissions, or double assessments, or when ordered by a court.
Are tax certificates transferable?
Certificates can be transferred by completing an endorsement form and paying the applicable fees through the Tax Collector's office.
When are county-held certificates available for purchase?
County-held tax certificates, other than those with homestead real estate under $250.00, may be purchased after the close of the tax sale. As the Tax Collector sells county-held certificates online using LienHub, the site has a link on the home page for this purpose labeled "Purchase County-Held Certificates."
What is the life of a tax certificate?
The statute of limitation on a tax certificate is seven years from the date of issuance. If a tax deed has not been applied for and no other administrative or legal proceeding exists, the tax certificate is null and void.
TAX DEED APPLICATIONS
What is the Florida tax deed process?
The holder of a tax certificate at any time after 2 years have elapsed since April 1 of the year of issuance of the tax certificate and before the cancelation of the certificate, may file the certificate and an application for a tax deed with the tax collector of the county where the property described in the certificate is located.
A certificate holder who makes application for a tax deed shall pay the tax collector at the time of application all amounts required for redemption or purchase of all other outstanding tax certificates, plus interest, any omitted taxes, plus interest, any delinquent taxes, plus interest, and current taxes, if due, covering the property. In addition, the certificate holder shall pay the costs of resale, if applicable, and failure to pay such costs within 30 days after notice from the clerk shall result in the clerks entering the land on a list entitled lands available for taxes.
The tax collector will certify to the Clerk of the Circuit Court a list of all persons required by law to be notified prior to the sale of the property and a certification of monies involved in the application. The tax deed applicant will then be notified of the additional funds needed for advertising and other costs. After all necessary advertising and noticing, the Clerk's office will schedule a tax deed sale date. The tax deed applicant receives 18% per annum interest on the application, beginning the month after application through the month of redemption or tax deed sale date. If the property is purchased by a person other than the certificate holder, the certificate holder will be reimbursed all of the sums paid, including the above referenced 18% interest. For complete rules please see Florida Statute 197.502.
Can I apply for a tax deed online?
Some tax collectors use LienHub for online tax deed applications. For more information, go to the LienHub site and select the county from the menu on the home page. For tax collectors that do not use LienHub, see the tax collector's website for more information.
Can a homestead property be sold by tax deed?
Yes, but the opening bid on property assessed on the latest tax roll as homestead property shall include, in addition to the amount of money paid to the tax collector by the certificate holder at the time of application, the amount required to redeem the applicants tax certificate, and an amount equal to one-half of the assessed value of the homestead property as listed on the current year's tax roll.
Who conducts the tax deed sale?
The Clerk of the Circuit Court. The tax deed is issued to the highest bidder. The opening bid must include all the costs paid by the tax deed applicant plus all other costs for conducting the sale. The titleholder of record has the right to redeem the property by paying the Tax Collector all previously described costs at any time before full payment for a tax deed is made to the Clerk of the Circuit Court.
Sam C. Steele, CFC
Monroe County Tax Collector
1200 Truman Ave., Ste. 101
Key West, FL 33041