What is the Deal with California Tax Liens?

California handles tax liens differently than many other states. Here’s what you need to know about how tax liens work in California.

1. Tax Deed Sales: In California, counties conduct tax deed sales, where properties with unpaid taxes are sold at public auctions. The highest bidder at these auctions receives the property deed, subject to any existing liens or encumbrances.
2. Redemption Period: California does not have a redemption period after the tax deed sale. Once a property is sold at a tax auction, the sale is final, and the former owner does not have the right to reclaim the property by paying the back taxes.
3. Public Auctions: Tax deed sales in California are typically held online or in-person by the county tax collector's office. The sales are usually conducted as public auctions, and properties are sold to the highest bidder.
4. Minimum Bid Amount: The minimum bid at California tax deed sales usually includes the total amount of delinquent taxes, penalties, and costs associated with the sale. This minimum bid varies depending on the property's tax history and the county's specific rules.
5. Property Title Issues: Properties purchased at tax deed sales may come with existing liens or other encumbrances. It is crucial for investors to conduct thorough due diligence before bidding to understand any potential issues with the property title.
6. Due Diligence: Investors should research properties before bidding at a tax deed sale. This includes checking the property's condition, verifying any existing liens, understanding the local market, and determining the potential for resale or rental income.
7. Legal Considerations: California tax deed sales are subject to state laws and county regulations. It's important to review the specific rules of the county where the sale is taking place and consult with a real estate attorney or professional if necessary.