Courier & Press Reports Tax Sale Buyers Betting They Won't Keep Properties
From the Evansville Courier & Press:
A sale occurred Friday that constituted, for many present, a bet that people who haven’t paid Vanderburgh County property taxes for a year-and-a-half will keep their properties.
The annual tax sale offered 494 houses, lots and structures — rental, commercial, owner-occupied — whose owners failed to pay three consecutive seasonal installments of county property taxes.
Two-dozen properties in the “buyer beware” sale had raze orders, meaning the Evansville/Vanderburgh County Building Commission and a hearing officer deemed them unsafe. Seven of those were sold. The Evansville Brownfields Corp., a nonprofit corporation that acquires environmentally distressed and vacant or abandoned properties, bought one such house. The Brownfields Corp., blamed a limited budget for not buying more of the unsafe structures.
Of the 170 properties that ended up selling Friday, county officials expect most ultimately will return to the same delinquent taxpayers. The other 324 are subject to being taken by the County Commissioners and auctioned next year — but not before their owners get one last chance to reclaim them.
The delinquent taxpayers must pay through the nose to make it happen.
“You’re better off paying your taxes originally,” County Auditor Joe Gries said.
State law allows delinquent taxpayers one year from the date of sale to redeem property purchased at tax sale. But he must pay the buyer per annum interest of up to 10 percent of the difference between the minimum bid necessary to recoup lost taxes and the buyer’s winning bid. It can be sizable.
If the 170 properties that sold each fetched only the minimum bid — they would have brought about $523,000. But the winning bids added up to nearly $2.4 million.
That kind of potential to score interest payments from delinquent taxpayers — per annum payments that only increase with time — brings plenty of “investors” to the annual tax sale. Those investors don’t necessarily want the property. They’re betting instead that the delinquent taxpayers will redeem and be compelled to pay them.