What a tax deed sale is
When property taxes go unpaid long enough, the county can sell the property to collect them. In a tax deed sale the winning bidder gets a deed to the property itself, not just the right to collect the debt, as with a tax lien certificate.
There are three broad systems:
- Tax deed states sell the property outright (California, Michigan, Washington, New York, Pennsylvania and others).
- Redeemable deed states sell a deed, but the former owner can still buy the property back for a set period by paying a premium (Texas, Georgia, and in practice South Carolina).
- Lien states like Florida sell a certificate first and hold a deed sale only if the owner never redeems.
Our overview of tax lien vs. tax deed explains the difference in more depth.
Tax deed rules in the major states
| State | When the property can be sold | Owner's right to redeem after the sale |
|---|---|---|
| Texas | After a lawsuit and judgment for the taxes | 2 years for homesteads and farmland (25% premium in year one, 50% in year two); 180 days for other property |
| Georgia | After a tax execution; buyer gets a sheriff's deed | At least 12 months; owner repays the price plus a 20% premium for the first year and 10% for each year after |
| South Carolina | After the taxes go delinquent; bidders pay a premium | 12 months, paying interest of 3% to 12% depending on how many months have passed |
| California | After 5 years of default (3 for some commercial property) | None after the sale; the owner can redeem until the day before |
| Michigan | County forecloses, then auctions | None after foreclosure; the former owner can claim surplus proceeds |
| Washington | County forecloses after 3 years of delinquency | None after the sale; surplus held 3 years for the former owner |
| Pennsylvania | Upset sale, then judicial sale if it fails | Generally none for most counties |
| New York | In rem foreclosure, generally after 2 years | None after foreclosure; former owners can claim surplus |
| Florida | Deed sale after a lien certificate holder applies, at least 2 years after the certificate | Owner can redeem until the winning bidder pays the clerk in full |
Two details trip up buyers. In Georgia you get no possession, rents or right to improve during the first 12 months, and after that you have to send a formal "barment" notice to cut off redemption. In Pennsylvania, a property bought at an upset sale stays subject to mortgages and other recorded liens. Only a later judicial sale clears them.
What changed after Tyler v. Hennepin County
In May 2023 the U.S. Supreme Court ruled unanimously in Tyler v. Hennepin County that a county violated the Constitution's Takings Clause by selling a woman's condo for unpaid taxes and keeping everything above what she owed. The holding: a government can take property to collect a tax debt, but it can't keep the owner's equity.
Several states have rewritten their laws since then. Michigan had already created a surplus claim process after its own supreme court's 2020 Rafaeli decision: a former owner files Form 5743 by July 1 after the foreclosure and then a court motion. New York added a surplus procedure in 2024, retroactive to the Tyler decision. New Jersey's 2024 law lets owners petition the Superior Court for surplus equity. For buyers, the practical effect is more paperwork and, in some states, longer timelines before title is final.
How to buy at a tax deed sale
- Find the sale. County treasurer, tax collector or sheriff's websites post sale lists, often called a tax delinquent property list, weeks in advance. Many counties now hold auctions online.
- Register and read the terms. Most require a deposit and payment in full, often within 24 hours, by certified funds or wire. There's usually no financing.
- Research every parcel. Drive by or check street view, pull the recorded documents (see how to check for liens), and look for code violations, environmental issues and IRS liens. Find out whether the property is occupied.
- Check what survives the sale. Depending on the state and sale type, mortgages, IRS liens, HOA liens or municipal liens may stay attached. An IRS lien can survive a nonjudicial sale if the IRS wasn't properly notified, and the IRS can redeem within 120 days.
- Plan for redemption. In Texas, Georgia and South Carolina the former owner may buy the property back. You'll get your money plus the premium, but not the property.
- Budget for clearing title. Title companies often won't insure a tax deed until a quiet title action is completed. Add that cost, any eviction, back utilities and repairs to your bid math.
Properties that get no bids often become available afterward at the minimum price, for example on Florida's "lands available for taxes" list. They're usually unsold for a reason.
If your home is headed for a tax deed sale
Act before the sale date. Until then, paying the full amount owed to the county stops the sale in every state. Many counties offer payment plans, and seniors may qualify for deferral (see deferral programs). In Texas, if your homestead is sold you still have two years to redeem. And if the house is sold for more than you owed, you're entitled to claim the surplus, but each state has its own deadline. See what happens if you don't pay property taxes.
Sources
Texas Tax Code § 34.21 (as explained by the Texas A&M Real Estate Center and county tax offices); O.C.G.A. §§ 48-4-42, 48-4-45 and 48-4-46 (as summarized by Georgia local governments); S.C. Code §§ 12-51-90 and 12-51-130; Cal. Rev. & Tax. Code § 3691 and county tax collector notices; MCL 211.78t and the Oakland County Treasurer; RCW 84.64; Pennsylvania's Real Estate Tax Sale Law; N.Y. RPTL Article 11 and § 1197; Fla. Stat. § 197.502; 26 U.S.C. § 7425; and Tyler v. Hennepin County, 598 U.S. 631 (2023). This is general information, not investment or legal advice.