What Happens If I Don't Pay Property Taxes in Florida?

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for things like schools, public services, libraries, roads, and parks. Typically, the tax amount is based on a property's assessed value. If you have a mortgage on your home, the loan servicer might (on behalf of the lender) collect money to pay the property taxes as part of the monthly mortgage payment. The servicer then pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. Accordingly, if you don't keep up with the property taxes on your Florida home, you could eventually lose your home to a tax sale. In Florida, the tax collector will initially sell the tax lien in a tax lien sale. Then, if you don't pay off the lien, the tax collector can sell your home in a tax deed sale.

Fortunately, the process will take some time, and along the way, you'll get several notices and opportunities to get current. After a sale happens, you might be able to get it back by quickly paying off the delinquent taxes, plus interest, costs, and perhaps other charges.

Florida Property Tax Lien Sales and Tax Deed Sales

Again, if you don't pay your property taxes in Florida, the delinquent amount becomes a lien on your home. (Fla. Stat. § 197.122). Once there's a tax lien on your home, the tax collector may sell that lien at an auction. This auction is called a "tax lien sale." Then, if you don't pay off the lien, the tax collector may eventually sell the home at what is called a "tax deed sale."

How Tax Lien Certificate Sales Generally Work

In a tax lien certificate sale, the taxing authority sells the tax lien, and the purchaser gets the right to collect the debt along with penalties and interest. If the delinquent amounts aren't paid, the purchaser can typically foreclose or follow other procedures to convert the certificate to a deed.

In some jurisdictions, though, a sale isn't held. Instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale.

How Do Florida Tax Lien Sales Work?

In Florida, the tax collector must send you a notice by mail or electronically (if you've agreed to receive notice this way) by April 30 if your payment hasn't been received. The notice will include a description of the property and a statement that a tax certificate may be sold if the taxes aren't paid. (Fla. Stat. § 197.343). The tax collector must also publish notice in a newspaper. (Fla. Stat. § 197.402).

Typically, tax lien sales are by auction over the Internet. After the sale, the person who bought the lien receives a certificate (sometimes called a "tax lien certificate") and, along with it, the right to collect the tax debt from you, plus interest. The winning bidder at the tax lien sale will be the person who pays the taxes, interest, and costs and charges the lowest interest rate on the debt, not in excess of the maximum rate of interest allowed by law. (Fla. Stat. § 197.432). But if you owe less than $250 in delinquent taxes and your home has been granted a homestead exemption, the lien can't be sold at a public auction. Instead, the tax collector will issue the certificate to the county. (Fla. Stat. § 197.432).

How Do Florida Tax Deed Sales Work?

Two years after April 1 of the year that the collector issues the certificate, but no later than seven years, the purchaser who bought the lien can apply for a tax deed from the tax collector. (Fla. Stat. §§ 197.502, 197.482). This application initiates the tax deed sale process.

At least 20 days before the tax deed sale, the collector must send you a notice by certified mail. Also, the county sheriff must personally serve you, the legal titleholder, notice 20 days before the sale or post the notice in a conspicuous place on the property if personal service isn't possible. (Fla. Stat. § 197.522). Notice must also be published in a newspaper or, if no newspaper is available, posted publicly. (Fla. Stat. § 197.512).

The clerk of the circuit court conducts the tax deed sale, which is also a public auction, to sell the property to the highest bidder. The tax certificate holder (the person who bought the lien) will likely bid the amount of the debt owed to that person rather than cash. So, if no one else bids on the property, the tax certificate holder gets the home. (Fla. Stat. § 197.542).

How to Redeem the Property

Many states give delinquent taxpayers the chance to pay off the amounts owed and keep the home. This process is called "redeeming" the property.

How the Right to Redeem Usually Works

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.

In other states, though, the redemption period happens before the sale.

Right to Redeem the Property In Florida

In Florida, you can redeem the home at any time before the county issues the tax deed to the new owner, but not if the court clerk has already received full payment for the deed. So, you must act quickly to redeem after a tax deed sale.

To redeem, you have to pay the tax collector the face amount of the tax certificate plus all interest, costs, and charges. (Fla. Stat. § 197.472).

What Happens to a Mortgage in a Tax Deed Sale?

Property tax liens almost always have priority over other liens, including mortgage liens and deed of trust liens. (For purposes of this discussion, the terms "mortgage" and "deed of trust" are used interchangeably.) Because a property tax lien has priority, if your home is sold through a tax sale, the sale wipes out any mortgages. So, the loan servicer will usually advance money to pay delinquent property taxes to prevent a tax sale. The servicer will then demand reimbursement from you (the borrower).

The terms of most mortgage contracts require the borrower to stay current on the property taxes. If you don't reimburse the servicer for the tax amount it paid, you'll be in default under the terms of the mortgage, and the servicer can foreclose on the home in the same manner as if you had fallen behind in monthly payments.

Your Servicer Might Set Up an Escrow Account

After demanding repayment of the amount it paid for the taxes, penalties, plus interest (and assuming you repay this tax debt), your servicer will probably set up an escrow account for the loan. Each month, you'll have to pay approximately one-twelfth of the estimated annual cost of property taxes—and perhaps other expenses, like insurance—along with your usual monthly payment of principal and interest. This money goes into the escrow account.

The downside to having an escrow account is that you'll have to make a bigger payment to the servicer each month. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and perhaps other bills, are due.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay. If you're already facing a property tax lien sale or tax deed sale in Florida and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.