Tax Sales

Louisiana conducts tax sales as public auctions. They sell properties with unpaid property taxes to the highest bidder. Here's a general outline of how tax sales work:

1. Property owners receive a notification of the tax sale by mail and public notices. They get these if they have delinquent taxes. The local parish tax collector's office handles this task.

2. Public Auction: The tax sale is usually conducted as a public auction. The auctions may be online or in person. It depends on the parish. Parishes in Louisiana vary in their auction process regulations.

3. Bidding Process: During the auction, bidders can buy a tax lien certificate. They cannot buy the property itself. The winning bidder is paying the owed taxes to the parish. In return, they receive a tax lien certificate. The bid starts at the delinquent tax amount. It also includes penalties, interest, and sale costs.

4. After the sale, the original owner has a period to redeem the property. In Louisiana, residential properties have a three-year redemption period. To redeem the property, the original owner must pay the purchaser the bid amount plus a penalty. The penalty can be up to 5% per year and interest. For more information, see Tax Lien Redemption. 

5. Property Title: If the owner does not redeem it within the period, the buyer can apply for a tax deed or title. This may involve more legal steps. For example, filing a lawsuit to quiet title. This removes any remaining claims or disputes over the property.

Bidders compete to buy property tax debt at tax sales. Here's a more detailed look at how the bidding process works.

1. The starting bid is usually the amount of the delinquent taxes owed. This amount includes any penalties, interest, and sale-related administrative costs. This total becomes the minimum bid for the property at auction.

2. Incremental Bids: Bidders then raise the bid amount in increments. Each auction may establish specific rules about the minimum increment for raising bids.

3. Type of Auction:

   • Louisiana utilizes premium bids. The highest bid wins. The premium is the amount bid over and above the minimum tax debt amount.

   • This is especially true in other states. In those cases, the auction may involve bidding down the lien's interest rate. This is instead of bidding up the price. Yet, the premium bid method is more typical in Louisiana.

4. Winning the Auction: The highest bidder at the end of the auction wins the right to the tax lien certificate. You get the tax debt, interest, and penalties if the original owner buys back the property.

5. Payment: The winning bidder pays the bid amount upon the auction's conclusion. You usually must make this payment in certified funds, such as a cashier's check.

6. Rights Acquired: The winning bidder does not immediately get ownership of the property. Instead, they receive a lien against the property. The owner has a redemption period. Louisiana residential properties have three-year contracts as a standard provision. During that time, they must pay the owed amount plus interest and penalties to the lienholder. For more information, see Tax Lien Redemption. 

7. If owners don't pay off their debt in time, lienholders can take steps to get the property. This might mean suing for a clear title.

A homeowner has many ways to prevent a tax sale of their property.

1. Paying the outstanding taxes is straightforward. The best way is to pay the overdue taxes, any fees, and interest before the tax sale date.

2. Some tax authorities offer payment plans. They let homeowners pay their back taxes over time, rather than all at once.

3. Tax relief programs vary by location and homeowner situation. Age, income, and disability often affect eligibility. They may reduce the tax burden or delay the tax sale.

4. The homeowner may be on active military duty. If this is the case, federal laws like the Servicemembers Civil Relief Act may protect them. This law can provide relief from tax sales. For more information, see Veterans and Military. 

5. Filing for bankruptcy freezes a tax sale in its tracks. This action triggers an automatic stay. It stops creditors, including tax authorities, from collecting debts until the bankruptcy ends. For more information about filing for bankruptcy, see Bankruptcy. 

6. Seeking Legal Advice: Consult with a lawyer who specializes in property or tax law. Realtors offer custom tips and plans based on your situation and local laws. For more information, see Finding and Hiring a Lawyer. 

During Louisiana's redemption period, you can reclaim your property. This is if someone sells it at a tax sale. You can do so by following certain steps. Here’s how you can go about redeeming your property.

1. Understand the Redemption Period. In Louisiana, the period is usually three years for homes. It starts from the tax sale date. This period may vary based on the type of property and the parish. It is crucial to know how long you have to redeem the property. For more information, see Tax Lien Redemption. 

2. Calculate the redemption cost. To redeem your property, you must pay the price the purchaser paid at the tax sale. You must also pay interest and any penalties. The interest rate can be up to 5% per annum in Louisiana. Furthermore, you may need to repay the tax sale buyer. You must repay them for any property taxes they paid on your behalf during the redemption period.

3. Call your local tax office. Ask about the total amount due and any required paperwork. They can provide details. They can tell you who holds the tax sale certificate for your property.

4. Arrange Payment: Once you know the total amount, arrange to make the payment. Use certified funds, such as a cashier's check, to complete this requirement. Make sure you get a receipt or other proof of payment.

5. Get a Redemption Certificate. After you pay, the tax collector’s office should issue it. This document proves that you have paid all dues. You own the property through lawful recovery.

6. Notify the Tax Sale Purchaser. Inform the buyer of the tax sale certificate that you have redeemed the property. The tax collector's office handles this in some cases. It is crucial to ensure that all parties are aware.

7. Update Property Records. Check with the local parish records office. Ensure that you remove any liens from the tax sale. This step is crucial to clear your property title.

8. Seek Legal Advice. If the process is difficult or there are disputes, consult a lawyer. The lawyer should specialize in real estate or tax law. They can guide you through the redemption process and help resolve any issues. For more information, see Finding and Hiring a Lawyer. 

In Louisiana, buying a part of a property at a tax sale has unique rules. These regulations are specific to state tax sales and property laws. Here's what might happen:

1. Undivided Interest: Buying a part of a property means getting an undivided share. You don't get a separate piece, but a percentage of the whole. Both you and the original owner then own the property.

2. Redemption Period: The original owner has three years to buy back the property. They need to pay the overdue taxes, penalties, and interest. Revoking the sale returns the property to its original state. Learn more about Tax Lien Redemption.

3. The buyer must inform the original owner and others. They must inform them of the right to buy back the property. You must provide this notice 6 months before the redemption period ends. You must provide it within 6 months of the sale. More details are available at Tax Lien Redemption.

4. Quiet Title Action: If the owner does not buy back the property, the buyer can file a quiet title lawsuit. This confirms the buyer's ownership and removes the original owner's claims.

5. Partial ownership complicates management, use, and sale. All co-owners must agree or seek legal help.

Buyers in Louisiana face partial property purchases. They need to consult a real estate attorney. This is crucial. This expert should know the state's tax sale laws well. For more information, see Finding and Hiring a Lawyer. 

When someone buys a property at a Louisiana tax sale, they face initial limits on their rights. The buyer cannot live in or improve the property. They also cannot collect rent. They get full rights over time. If the owner does not buy back the property within three years, the buyer can start to get full rights. This often entails filing a lawsuit. It resolves any remaining property claims or disputes. It is crucial to notify the original owner and other interested parties. This confirms the process's legal validity.

Tax sale buyers in Louisiana must understand their rights and duties. Let's look at these closely.

Rights of the Buyer:

1. They get a "Certificate of Sale" or "Tax Sale Title." This marks their claim to the property.

2. They might own the property fully if the original owner doesn't reclaim it within three years.

3. If the owner does reclaim the property, the buyer gets their investment back with interest.

Duties of the Buyer:

1. They must maintain the property, following local rules. This includes upkeep like cutting grass, removing debris, and securing the building.

2. It's crucial to pay property taxes. Missing payments could put the property back into a tax sale, risking the buyer's investment.

3. The buyer must follow local laws. They can't use the property for personal or business purposes until they fully own it.

Becoming the Full Owner:

• The buyer should wait for the redemption period to end.

• If the property remains unredeemed, the buyer can start the process for a tax deed or full title. This might involve legal steps, like filing a quiet title lawsuit.

Here's how to own property after a tax sale.

1. The Redemptive Period has ended. Former owners have a short time to pay overdue taxes and reclaim the property. If they don't, the new owner's claim strengthens. For more information, see Tax Lien Redemption.

2. Quiet Title Action: After this period, the new owner can file a lawsuit to quiet title. This clears any disputes or claims. It also avoids issues that might affect the new owner's rights. Past owners, mortgagees, and lienholders all get informed of the lawsuit.

3. Defense by Former Owners: Previous owners may challenge the tax sale's validity. If they fail, the court usually confirms the sale, granting full ownership to the new owner.

4. Insurable Title: To sell or renovate the property, the new owner needs an insurable title. This title is free of liens or issues that could impact future owners or financiers. It's usually obtained through the quiet title action.

5. Interested parties can challenge the Nullity Action within six months of getting notification. Or, they can challenge it when a quiet title action begins. In the latter case, they have a 60-day deadline for sales over five years. If the new owner does not challenge, the court often rules in their favor.

6. The new owner may need to take partition action if they don't own the whole property. They might need to divide or sell it through a partition action. The proceeds are then distributed based on each owner's share.

If a property does not sell at a tax sale in Louisiana, it does not remain with the delinquent owner. Instead, the property becomes adjudicated to the local government. The parish or municipality then takes ownership of it. Here's what happens next:

1. Adjudication to the Government: No one bought the property at the tax sale. So, the local government (parish or city) takes ownership due to the unpaid taxes.

2. The original property owner has the Right of Redemption. They still have the chance to reclaim the property. In Louisiana, the redemption period typically lasts three years from the date of the tax sale. During this time, the original owner can pay the owed taxes. For more information, see Tax Lien Redemption. 

3. The Government may sell a property after adjudicating it. They do this to recover the unpaid taxes. This is often done through a separate public auction or sale process. Buyers can buy these properties. These properties usually offer lower prices than those in standard market sales.

4. Notification and Registration Requirements: The local government must keep a public registry. It must list all adjudicated properties. They must also try to tell the original owner and any lienholders about the decision. They must also inform them of their right to repurchase the property before selling it again.