Indiana tax lien sale question

Tax Liens & Mortgage Notes
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Indiana tax lien sale question

Sophie Wang
Investor · Denver, CO · Member since 2015 · 22 posts · 6 votes

Hey guys,

I have been investing in tax liens in AZ, CO and FL, this year I am looking into Indiana, but it seems things are very different in IN and I am a bit confused. 

First, the types of the auctions. I looked at SRI and ZeusAuction, and saw multiple terms/auctions, like "certificate sale", "deed sale", "Sherriff sale", "Tax sale", "foreclosure sale". I thought Indiana is a tax lien State, then what is the "deed sale"? Also are "sheriff sale" and "foreclosure sale" the same thing, which is when the mortgage is behind? Or is "sheriff sale" for judgement?


Second, minimum bid/face amount vs the amount of taxes behind.  For example, a property in tax sale in LaPort County, the face amount to bid is $100.00, but when I looked at the county record for this property, it shows 2020 tax due 2021 is $6194.88, 2019 due is $6194.88, 2018 due is $4886.88 etc ( see the screenshots for tax and evaluation history below). How does that work?

  1. 1. How can a property valued for 18k owe $6194 in tax in a year? Does the 2021 tax due include all previous years' tax behind, as in the $6194 due in 2019 include the $4886 due in 2018? Or is the $6194 for 2019 year alone?
  2. 2. If someone bid $2000 for this property and won the certificate, and if the owner does not redeem in 12 months, the certificate holder forecloses and apply for the deed, then is he/she responsible for paying all the tax behind for all previous years, in this case $6194+$6194+$4886+$3775+$2363? 


Thanks guys! If anyone can shed some light on these questions that would be great! Appreciate it!

Sophie

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Adrien C.
Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
5y

Indiana has 2 sales a year (at least my county but pretty sure most counties are similar). In the fall is the regular sale. This is where properties start. The opening bid is the amount of taxes owed. To qualify, a property has to miss 3 payments to hit the sale. Depending on the timing, the property could be 4 payments behind first. Each missed payments has a massive delinquent penalty like 10% plus other fees like grass cuts, sewer, city board ups, etc can be certified and added to the taxes. So the amount of delinquent tax can balloon quickly. The spring sale known as the commissioners sale is what didn't sell in the fall. The opening bid is $500 (in my county). If the delinquent taxes are $16K but you win the lien for $2K, that's what you pay. On top of that, you're responsible for attorney fees and the current year taxes. You're not responsible for the difference at the time between your bid and the delinquent amount. 

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    5y

    @Sophie Wang are SRI or ZeusAuction the official sites for IN. If not then the terms they are using don't matter. They may be pulling different types of auctions form public records,not just tax sale auctions.

    I have never heard of SRI or ZeusAuctionWho are they?

    1Reply
  • Sophie Wang
    OP
    Investor · Denver, CO · Member since 2015 · 22 posts · 6 votes
    5y
    1Reply
  • Jason Duhn
    Attorney · IN · Member since 2021 · 16 posts · 14 votes
    5y

    Advising Material

    Hi Sophie,

    As to your first question:

    - Certificate/deed/tax sale are all the same thing in Indiana.  

    - Foreclosure/sheriff sale are the same thing.  It could be a mortgage or other lienholder taking it through the sheriff sale as per a judgment issued by the Court.

    Thanks,

    Jason Duhn

    Indiana Attorney

    2Reply
  • Will Sifert
    Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
    5y
    Originally posted by @Sophie Wang:

    Hey guys,

    I have been investing in tax liens in AZ, CO and FL, this year I am looking into Indiana, but it seems things are very different in IN and I am a bit confused. 

    First, the types of the auctions. I looked at SRI and ZeusAuction, and saw multiple terms/auctions, like "certificate sale", "deed sale", "Sherriff sale", "Tax sale", "foreclosure sale". I thought Indiana is a tax lien State, then what is the "deed sale"? Also are "sheriff sale" and "foreclosure sale" the same thing, which is when the mortgage is behind? Or is "sheriff sale" for judgement?


    Second, minimum bid/face amount vs the amount of taxes behind.  For example, a property in tax sale in LaPort County, the face amount to bid is $100.00, but when I looked at the county record for this property, it shows 2020 tax due 2021 is $6194.88, 2019 due is $6194.88, 2018 due is $4886.88 etc ( see the screenshots for tax and evaluation history below). How does that work?

    1. 1. How can a property valued for 18k owe $6194 in tax in a year? Does the 2021 tax due include all previous years' tax behind, as in the $6194 due in 2019 include the $4886 due in 2018? Or is the $6194 for 2019 year alone?
    2. 2. If someone bid $2000 for this property and won the certificate, and if the owner does not redeem in 12 months, the certificate holder forecloses and apply for the deed, then is he/she responsible for paying all the tax behind for all previous years, in this case $6194+$6194+$4886+$3775+$2363? 


    Thanks guys! If anyone can shed some light on these questions that would be great! Appreciate it!

    Sophie

     I am not familiar with that state, but in general I can answer how can an 18K property owe that much in taxes...

    That is how properties end up being adjudicated (no one bids on them). I had property here that normally had a $79 a year tax bill end up being $4200.  It was because the local govt was cutting the grass for the year, put a lien on the property and that was added to the tax bill. Chances are it is some type of situation like that. One property I got at tax sale had an $1800 tax bill and it was just a vacant piece of land. However the tax bill showed an improvement on the property. The house must have been destroyed and torn down years before. I had them correct it and it was reduced to a couple hundred dollars. It's possible it could be an error as well.

    1Reply
  • Adrien C.
    Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
    5y

    Indiana has 2 sales a year (at least my county but pretty sure most counties are similar). In the fall is the regular sale. This is where properties start. The opening bid is the amount of taxes owed. To qualify, a property has to miss 3 payments to hit the sale. Depending on the timing, the property could be 4 payments behind first. Each missed payments has a massive delinquent penalty like 10% plus other fees like grass cuts, sewer, city board ups, etc can be certified and added to the taxes. So the amount of delinquent tax can balloon quickly. The spring sale known as the commissioners sale is what didn't sell in the fall. The opening bid is $500 (in my county). If the delinquent taxes are $16K but you win the lien for $2K, that's what you pay. On top of that, you're responsible for attorney fees and the current year taxes. You're not responsible for the difference at the time between your bid and the delinquent amount. 

    3Reply
  • Vince BartoliniPro Member
    Wholesaler · Indianapolis, IN · Member since 2026 · 14 posts · 3 votes
    2w

    Indiana is a tax sale certificate state (not a direct tax deed state initially), meaning the annual Treasurer's sale auctions off a lien (certificate) rather than the property itself, whereas a "deed sale" (like a Commissioners' Sale) happens later for unsold parcels where the county already holds the deed. "Sheriff sales" and "foreclosure sales" are legally the same thing; judicial mortgage foreclosures handled by the county sheriff due to bank default; which are completely separate from county tax sales. Regarding your LaPorte County example, the listed minimum bid is usually a reduced statutory figure or specific starting amount for that auction tier, whereas county tax histories list cumulative delinquencies; if you win the certificate and the owner doesn't redeem within 12 months, you petition for a tax deed and do not have to pay off all prior historical tax bills out of pocket because the tax deed process legally wipes out the underlying delinquent tax burden.

    [email protected]317-495-3440
    1Reply
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