Investing in Georgia Tax Liens aka Georgia Tax Deeds

Investing in Georgia Tax Liens aka Georgia Tax Deeds
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Buying Georgia tax liens is primarily a local’s market because of its random tax sale dates and the small auction sizes.  It’s really a combination of a tax deed state and tax lien state meaning that you are actually purchasing a sheriff’s deed to the property.  However, the property owner has a one year right to redeem.

If you’re looking to pickup properties, this is the best state to invest in.

Why?  At the auction, you bid a premium over and above what is owed for taxes.  Whoever bids the highest wins that property.  What’s interesting is that the taxpayer, in order to redeem, must pay the entire amount that you bid plus a 20% per annum penalty on that amount in order to get the property back.  In other states, such as neighboring South Carolina, the taxpayer only has to pay the delinquent taxes plus interest.  Thus, there is a much lower likelihood that the taxpayer can come up with the full amount.  Fortunately for the taxpayer (or lienholders), they can apply and take this overage if they lose the property to foreclosure.

How Do You Foreclose on Your Georgia Tax Deed?

Your first step as the tax deed holder is to run title on the property to see who has an interest in the property including all owners and lienholders.  Six months after the sale, the investor can send out a Notice of Foreclosure indicating that you are seeking to bar the right of redemption of all interested parties.  This notice is sent by certified mail or process server.  If no redemption is made before the one-year redemption period expires, then you’ve successfully closed out any rights to redeem.

However, this still doesn’t mean you are a free and clear owner of the property.  In order to sell the property with title insurance, you’ll need to file a Georgia quiet title action.  This is where you definitely need to hire an attorney.  They will file a quiet title suit and have a judge sign an order that clears title.  This can take six months to a year depending on the jurisdiction.

There’s an alternative that’s not widely used nor recommended where the tax deed holder can wait four years.  By Georgia tax lien statute, after this time the deed becomes fee simple and no quiet title is needed.  In the mean time, you’ll need to pay for subsequent taxes and be responsible for the property.  This could be an alternative for an investor just looking to hold or rent the property out for several years before selling it.

There is a guide published by the local tax commissioners that explains the entire process pretty well.  Here’s a link to the Cherokee County Tax Commissioner’s PDF version.

The Georgia Tax Deed Auction

Georgia tax auctions are held the first Tuesday of the month at the discretion of the tax commissioner.  This means that they won’t hold a sale unless they have enough properties to warrant holding an auction.  The auction will be advertised in the local newspaper and are all live auctions.  The opening bid will be the delinquent taxes and costs.  Then, the bid amount will be increased until the highest bid is reached.


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