when property taxes are left unpaid the taxing authority may sell the property s deed or title and therefore the property to recover the outstanding taxes 
the taxing authority usually a county government must go through a series of legal steps in order to acquire a tax deed these steps vary with local and municipal laws but include notifying the property owner applying for the tax deed posting a notice at the property and posting a public notice of sale tax deed salesin a tax deed sale the property with the associated delinquent property taxes is sold the sale takes place through an auction with a minimum bid of the amount of back taxes owed plus interest as well as costs associated with selling the property the highest bidder wins the property the tax deed legally transfers ownership to the purchaser on one condition the new owner must pay the entire amount owed often within 48 to 72 hours or the sale is canceled any amount bid by the winning bidder in excess of the minimum bid may or may not be remitted to the delinquent owner this depends on the jurisdiction the original owner may forfeit this excess amount if they do not claim it within a specified period of time in california for example claims must be filed within one year while the deadline in texas is two years 23 in georgia funds can be claimed up to five years after a tax deed sale at which point a court order is required to retrieve excess funds 4some states have a redemption period during which the original owner may pay back their tax debt and reacquire their former property special considerationswhile some states sell the title to the winning bidder the day of the tax deed sale auction others will allow a redemption period during which the original owner has an opportunity to repay their tax debt and redeem the property if the owner chooses to pay their debt obligations within this period they must pay the winning bidder the amount bid at the auction plus interest a total which can be quite high however if the redemption period passes and the owner still does not reclaim their property deed the highest bidder has a chance to foreclose on the property the redemption period in idaho for example is 14 months while owners in iowa have one year and nine months to redeem their property 56tax deeds vs tax lienstax liens are similar to tax deeds with some subtle differences while tax deeds transfer ownership of the property itself to a new party tax liens are a legal claim against the property when the taxes aren t paid tax liens provide a relatively cheap investment for investors with a guaranteed return liens can cost anywhere from a few hundred to a few thousand dollars and pay simple interest that accrues on a monthly basis the lien process begins when a government body places a lien against a property if its owner defaults on their property taxes these liens prevent owners from doing anything with the property including refinancing or selling it they rather than the property itself are sold off at auction interested parties can invest in these tax liens by bidding for them the return is based on a maximum rate of interest allowed by the municipality 