Tax sale

Today’s Washington Post pages G1-G10 is the Notice of Real Property Tax Sale.
What’s that?
Well a) it is a list of people who didn’t pay their property taxes and b) it is a financial opportunity. The opportunity is in the interest paid on the taxable amount owed and on the off chance that the tax is not paid by the property owner a chance to foreclose on the property. When you go to the tax auction what you’re bidding on is a tax lien and you must begin foreclosure procedures after 6 months. Most of the time property owners pay their taxes so it is just a way to earn interest. But still a lot of people believe they are buying the property and that is not so.
There are a few Truxton Circle properties with liens up for bid on Squares 507, 509E, 519, 521, 552, 553, 553W, 555, 614, 615, 616, 617 & 618. A fair number of them are empty lots that cannot be improved on. I was talking with some folks living up around Richardson Place and apparently some folks got the empty land around there thinking they could put a small house on it. Nope. Best thing for those types of properties would be a community garden. A very small community garden.
I’ve done the tax sale once. What I took away from it was that I should never bid angry. My hairdresser used to bid annually, and that was how she acquired some properties, but that was back in the day when no one wanted to live in the city. Will I bid again? Dunno.
For more information on the DC Tax Sale go to DC.Gov or click here. The site is still talking about the 2004 Tax sale but the rules are still valid.

2 thoughts on “Tax sale”

  1. Did a quick scan of some of the documents but am still a little confused about the actual financial transactions.

    For example, lets say that someone is behind on their taxes to the tune of $5000. I am bidding on the lein and I win it. Lets say that the owner pays his back taxes, penalties and interest. So I get the interest. I guess my question is how does one go about determining the value of the lein to know what to bid on it (i.e. I obviously don’t want to bid more money than I’m going to get back)?

  2. Well I thought the interest that needed to be paid is 18%, I’d have to check on that. Typically, you bid more than taxes owed. Anything over the tax amount is surplus, you do not earn any interest on that. Taking in interest earned on taxes and loss of interest from the surplus is how I figure the value. Now if the goal is the value of the property on the off chance you have to foreclose then that requires some investigation by going to the city offices on North Capitol and seeing what leins are on the property.

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