Neighborhood Transformation
Neighborhood Transformation

Florida Tax Certificates and Tax Deeds

Part 1:  Privately-held Certificates

Florida Statutes Chapter 197 gives to the state's taxing authorities the power to sell tax certificates in order to recoup revenue lost because of unpaid property taxes. The county holds an annual public auction at which private citizens can bid on the tax certificates. Each certificate is valued at the amount of the taxes owed for that year on an individual piece of property. The certificate accrues value at the rate of interest set by the bidding process until someone with a valid interest in the property redeems the certificate from the county. At that time, the certificate holder recoups his investment when the county pays him the value of the certificate.

However, the true value of the certificate to the private holder lies in the provision giving him the option, after a waiting period, of acquiring the property for the value of the taxes owed. He does so by applying for a tax deed, paying a deposit equal to the sum of all taxes owed on the property. This process initiates a public auction at which the minimum bid for the property is the tax deed holder's deposit. The property is sold to the highest bidder. Certificates not redeemed, or for which no tax deed has been applied expire after a specified period.

In the process described above, because the properties involved are commercially valuable they are able to attract a bid at the auction of the certificates. This fact allows the county to collect money to replace the unpaid taxes, the main purpose of the statute. Additionally, the waiting period allows the delinquent taxpayer time to pay the taxes and recover the property, if he so desires or is able to. The certificate holder makes an investment which he recoups, either by collecting the interest on the certificate, or by acquiring the property at below-market prices for the sum of the taxes owed on the property. Thus, the process described above serves several functions.

BUT, A very different situation exists with respect to those properties that are unable to attract a private buyer for the tax certificates. Read "Part 2" below.

Part 2:  County-held Certificates

The statute requires that the tax collector issue the tax certificate to the county when: a) there are no bids at the public auction for an amount more than the total of the taxes owed; or b) the certificate represents delinquent taxes of less than $100.00 on homestead property. After a specified waiting period, the county must apply for a tax deed on the property, although, unlike the private certificate holder, the county is not required to make a deposit. If no one bids for the property at the tax deed auction, the county must continue to keep the property available for sale by placing it on a "List of Land Available for Taxes" for an additional waiting period. Taxes continue to accrue during this second waiting period. If this period expires with no takers for the property the title escheats to the county.

If a County acquires title to a property through a tax deed, and, the property is located within the boundaries of a municipality the county must transfer the title of that property to the municipality.

Short Commentary on
Process for County-held Certificates

Properties that end up being escheated to the county typically have been abandoned by the owner and have little commercial value. Unlike the situation with privately-held certificates, these properties do not attract buyers at the public auction making the likelihood of redemption low. Thus, the utility of the two waiting periods that encompass several years, during which the properties continue to accrue taxes, is questionable. Eventually, the taxes owed exceed any commercial value the properties held.