State Summary

Tax Collection Method: Liens
Primary Bidding Type: Premium
Redemption Period: 1 year
Redemption Interest Rate/Flat Penalty: A 10% flat penalty is assessed on the minimum bid amount if redeemed within six months of the sale date. A 15% flat penalty is assessed on the minimum bid amount if redeemed after six months of the sale date and before the end of redemption period. The taxpayer must also pay an annualized 10% interest rate on the "overbid" (premium) paid by the tax lien purchaser at the sale.

The following information summarizes the life cycle, requirements, and administering of tax liens in the state of Indiana. Please read this information carefully. There are tax collection laws that pertain to all counties in Indiana, but be aware that there are subtle differences between the counties as well. When the word "typical" is used in the FAQs below, it indicates that most counties use this procedure/follow this convention, but not all counties.

Is Indiana a tax lien or a tax deed state?
Indiana is a tax lien state.

What is the name of the county official whom typically collects property taxes in Indiana?
Treasurer.

When are property taxes due in the state of Indiana?
Property tax payments are due in two equal installments in the year following the year of assessment. The due dates are May 10 and November 10. So, the property tax payments for the year 2009 are due May 10 and November 10, 2010.

When do property taxes become delinquent in the state of Indiana?
Property tax payments are considered delinquent the day after the two due dates. For each due date that is missed, a flat 10% penalty is assessed and added to the unpaid balance of the tax bill.

What is the name of the county official whom typically conducts tax lien sales in Indiana?
Auditor.

When does the typical Indiana county hold their annual tax lien sale?
The annual tax lien sales for most Indiana counties are held in September or October. The first sale for tax delinquent properties is known as the "A" sale. Subsequent tax lien sales, known as "B" sales, may be held by some counties to sell tax lien certificates that did not sell at the "A" sale. "B" sales in Illinois counties take place between January 1 and March 31. There must be at least a 90-day period between a county's "A" and "B" sales. Some counties also hold "C" sales throughout the year in an attempt to sell tax lien certificates that have been offered in at least two previous tax liens sales without success. All properties offered at "C" sales have been "struck off" to the county.

What are the registration requirements for the typical Indiana tax lien sale?
Registration requirements will vary by county. Generally, Indiana counties require a W-9 Form from each bidder. For Indiana tax lien auctions run by SRI Incorporated, bidders must register at least two days before a tax lien sale. Bidders must only register once to attend any SRI tax auctions.

What is the bidding type used at a typical Indiana tax lien sale?
Premium bidding at a public outcry auction.

What forms of payment are generally accepted at a typical Indiana tax lien sale?
Cash or certified funds.

What are the general terms of payment for the typical tax lien certificate purchased at an Indiana tax lien sale?
Generally, Illinois counties require full payment the day of the tax sale.

What is the maximum return (interest rate and/or flat penalty rates) investors earn while they hold the tax lien certificate?
A 10% flat penalty is assessed on the minimum bid amount if the certificate is redeemed within six months of the sale date. A 15% flat penalty is assessed on the minimum bid amount if certificate is redeemed after six months of the sale date and before the end of redemption period (12 months). The taxpayer must also pay a 10% annualized interest rate on the "overbid" (premium) paid by the tax lien purchaser at the sale.

Is the interest rate applied only to the minimum bid amount for each property, or is this interest rate also assessed on the premium or "overbid" paid for the property during the auction?
The 10% penalty (0-6 months after the sale) and the 15% penalty (6-12 months after the sale) only applies to the minimum bid amount for the certificate. A 10% annualized interest rate is also applied to the "overbid" amount paid by the tax lien purchaser at the sale.

Below is a hypothetical return scenario:

Minimum Bid = $1000.00
Winning Bid = $1500.00
Premium Paid = $500.00
Certificate redeemed almost 12 months after the sale

Since the certificate was redeemed more than six months after the sale, both the 10% and 15% penalties are assessed on the minimum bid amount. The 10% annualized interest rate accrued on the "overbid" amount for 12 months. The 10% annualized interest rate computes to a monthly rate of 0.83%.

Summary of Return

Initial Investment Returned = $1500.00
25% (10% + 15%) Aggregate Penalty on Minimum Bid Amount = $250.00
10% Annualized Interest on "Overbid" Amount = $50.00
Total Redemption Amount = $1800.00
Profit = $300.00
Percentage Return = 20% ($300.00 / $1500.00)

What is the redemption period for tax lien certificates in Indiana?
The redemption period is one year from the date of the tax sale.

Are tax liens certificates offered "over-the-counter" in Indiana?
Some counties offer "over-the-counter" tax liens certificates.

What is the name of the local official whom typically determines the values of properties on a annual basis?
Township Assessors work in conjunction with the County Assessor.

Does the typical Indiana county feature a Geographic Information System (GIS) application on their Web site?
A lot of Indiana counties have GIS applications available on their Web sites. GIS applications can be very useful for tax lien and tax deed investors because most of them feature aerial photos (some with zooming options), and a lot of them are integrated with tax bills and assessor/appraisal records, which simplifies the task of researching properties online.

For more information on the statutes regarding property tax collection, tax liens, and tax deeds in the state of Indiana, refer to the Indiana Code.

Indiana County Reference