US tax sale glossary with key terms defined in plain language, including: tax lien certificate (the unpaid-tax debt sold to an investor who earns interest), tax deed (the property itself sold to the highest bidder), redeemable deed (a deed subject to a redemption penalty, e.g. Texas, Georgia), minimum bid (taxes plus costs, not market value), redemption period (the window to redeem), interest rate (commonly 12–18%), IRS lien (can survive a tax deed), and quiet title (the action to obtain clear, insurable title after a tax sale).
Tax Sale Property Glossary
Plain-language definitions of key US tax sale terms — from tax lien certificate to quiet title.
Assessed Value
The value placed on a property by the county or state assessor for the purpose of calculating property taxes. Assessed value is often a percentage of market value and is NOT the minimum bid at a tax sale.
Barment (Georgia)
The legal process in Georgia by which a redeemable-deed holder forecloses (bars) the former owner's right of redemption after the 12-month period, typically followed by a quiet title action to obtain clear title.
Certificate of Purchase (CP)
The certificate issued to the winning bidder at a tax lien sale (the term used in Arizona and several other states). It represents the lien on the property and accrues interest until the owner redeems.
Clerk of Court / Clerk of the Circuit Court
The county office that conducts tax deed sales in some states (notably Florida). Distinct from the tax collector or treasurer who handles the earlier tax lien certificate sale.
Due Diligence
The process of investigating a property before bidding. Includes a title search, checking for surviving liens (e.g. IRS), confirming legal access, reviewing zoning and environmental records, and researching comparable sales. Since tax sale buyers often cannot inspect the interior, thorough due diligence is critical.
Encumbrance
Any claim, lien, charge, or liability attached to a property that limits or affects ownership — such as mortgages, liens, easements, and restrictive covenants. A tax sale extinguishes many encumbrances, but some (e.g. IRS liens, certain government liens) can survive.
Excess / Surplus Proceeds
The amount a tax sale brings in above the taxes, penalties, and costs owed. Depending on state law, surplus proceeds may be claimable by the former owner or junior lienholders. Procedures and deadlines vary by state.
In Rem Foreclosure
A tax foreclosure brought against the property itself rather than the owner personally. New York counties commonly use in rem foreclosure under Article 11 of the Real Property Tax Law to take and sell tax-delinquent property.
Interest Rate (Tax Lien)
The statutory return paid to a tax lien certificate holder when the owner redeems. Maximum rates vary by state (commonly 12–18%) and are often bid down at auction, so the effective return depends on competition.
IRS Federal Tax Lien
A lien filed by the IRS for unpaid federal taxes. Unlike most liens, an IRS lien can survive a tax deed sale and carries a 120-day federal right of redemption. Always check for IRS liens during due diligence.
Legal Description
The formal description of a property's location and boundaries recorded on the deed and in county records — typically lot/block and subdivision, or metes and bounds. Required on tax sale and deed documents.
Minimum (Opening) Bid
The lowest acceptable bid at a tax sale. Generally equals all delinquent taxes + accrued interest + penalties + the county's administrative and legal costs. It is NOT market value; some states add other amounts (e.g. Florida adds value for homestead property).
Parcel Number / APN
The Assessor's Parcel Number — a unique identifier assigned to each property by the county assessor. Formats vary by county (also called parcel ID, folio, or account number). Used to look up assessment and tax records.
Penalty Bidding
A bidding method (used in Illinois) where investors bid down a penalty rate of up to 18% per six-month redemption period; the lowest penalty wins the lien. The penalty is the investor's return when the owner redeems.
Phase I Environmental Site Assessment (ESA)
A non-invasive study of a property's environmental history to identify potential contamination. Recommended before bidding on commercial or industrial property, or residential land with prior non-residential use, because cleanup obligations can transfer to the buyer.
Quiet Title Action
A court action to establish clear, marketable, and insurable title after a tax deed or redeemable deed. Because tax deeds can carry title clouds, investors often complete a quiet title action before selling or insuring the property.
Redeemable Deed
A hybrid sale in which the buyer receives a deed but the former owner can redeem within a set period by paying the purchase price plus a penalty (e.g. Texas 25%, Georgia 20%). If not redeemed, the buyer keeps the property.
Redemption Period
The window during which the owner (or another interested party) can pay what is owed to keep or reclaim the property. It varies by state and sale type: e.g. Florida 2 years (lien), Arizona 3 years (lien), Texas 6 months–2 years (redeemable deed); most pure tax deed sales have no post-sale redemption.
Sheriff's Sale / Tax Foreclosure Sale
A public auction of a tax-foreclosed property conducted by the county sheriff (or constable). Common in Texas, Ohio, and many other states. The winning bidder receives a sheriff's or constable's deed once the sale is confirmed.
Tax Deed
The title document conveying a property to the winning bidder at a tax deed sale. A tax deed generally extinguishes most private liens (including mortgages) but may be subject to surviving liens and usually benefits from a quiet title action.
Tax Lien Certificate
A certificate representing the unpaid taxes on a property, sold to an investor at a tax lien sale. The holder earns interest until the owner redeems and may foreclose to acquire the property if it is never redeemed.
Tax Sale
The sale by a US county (or municipality) of a tax-delinquent property — or the right to collect its unpaid taxes — to recover what is owed. Depending on the state, the county sells a tax lien certificate, a tax deed, or a redeemable deed.
Title Search
Examining county records for a property to identify ownership, recorded liens, easements, and other interests. Essential before bidding; typically performed by a title company or attorney and costs roughly $100–$300.
Treasurer / Tax Collector
The county official who collects property taxes and, in many states, conducts the tax lien certificate sale (e.g. Arizona's County Treasurer, Florida's Tax Collector, California's Treasurer-Tax Collector).