For Arizona property owners, 50 percent of the property tax bill is due on October 1, and the other 50 percent is due on March 1 the following year. The October tax payment becomes delinquent November 1 if it remains unpaid, and the March tax payment becomes delinquent May 1 if it remains unpaid. Delinquent taxes accrue interest at a rate of 16% as long as they remain unpaid. If either tax installment remains delinquent after May 1, county treasurers will start mailing notices to delinquent taxpayers -- one in July and one in December. The December notice states that a 5% publication fee will attach to all unpaid delinquent tax as of the following January 1, and that a tax lien sale date has been set. To satisfy a lien, the property owner must pay all taxes, penalties and interest.
All Arizona tax lien sales are held in February. The bidding method at the auctions is Bid-Down Interest. In the Bid-Down Interest method, each property is started at the maximum interest rate (16%). The interest rate on each tax lien is then bid down, usually by a one-half or a full percentage point, depending on the county. With this auction method, the amount of the tax lien doesn't change, but the interest rate that will be collected by the purchaser of a tax lien certificate decreases from 16%. County tax sales will continue day-to-day (excluding weekends and holidays) until all properties have been offered. Properties that do not receive any bids are assigned to the State of Arizona.
All real property tax liens that are assigned to the State become available to investors as Over-the-Counter (OTC) certificates of purchase. OTC is also known as assignment purchasing. A certificate of purchase will be delivered to any investor willing to pay all taxes, interest, and any other charges and penalties.
In order to hold onto the certificate of purchase, the holder must pay all subsequent property taxes. If the purchaser holds on to the certificate for three years (from date of initial sale date of property), and the property owner does not redeem, the certificate holder has the right to start the foreclosure process in the Superior Court of the county in which the property is located. The certificate holder must submit a notice of intent to foreclose on the property to the property owner and to the county treasurer.
Maricopa County (Phoenix area) is the largest county in Arizona with over 3 million people. Maricopa and Pinal counties hold their tax sales auctions exclusively on the Internet. For more information on these Internet auctions, see the Maricopa County Web Site and Pinal County Web Site.
Arizona is a good state for tax lien investing for local and out-of-state investors. The county Web sites provide great information for investors, and the county treasurers are very helpful. I would advise you to take a look at the county Web sites and see what you think.
Arizona County Reference
Arizona Tax Liens
