How to Buy Tax Lien Property in California

By Kim Dieter
Counties may sell property when the property taxes have not been paid for five or more years.

house image by Sergey Dyadechkin from

California real estate may be sold in a tax sale if the owner has not paid the property taxes for five or more years. The treasurer or tax collector in the county where it is located sells tax lien or tax-defaulted property. The owner has the right to redeem the property by paying all back taxes until the close of business on the last business day before the sale. At the auction, the property is sold “as is” and the successful bidder gains legal title. Investors buy property at a tax sale because the sale price is often lower than market value.

Contact the California county of interest. Many counties have a website with information about tax lien or tax-defaulted property. Complete information about the property is often available online or published three to four weeks before the auction.

Find the method of sale. Most counties hold an on-line auction or an on-site auction to sell tax lien property one or more times per year. Information about the auctions is published in the legal notices of local newspapers.

Research the property thoroughly. Search the title and determine the location, permitted use and zoning. Determine if there are any liens or encumbrances connected to the property.

Contact title companies and determine their policy for issuing title insurance. Some title companies will not issue title insurance for tax-defaulted properties until one year after the sale.

Visit the property and find the boundary lines. Inspect the property to make sure there are no hazardous-substance problems. Ensure there is access to the property.

Research possible financing for the purchase of tax lien properties. Payment is usually required soon after the close of the auction. Often the county restricts the types of payment it will accept.

Determine the market value of similar, non-tax lien properties and bid competitively at the auction.

About the Author

Kim Dieter has taught agriscience classes, developed curriculum and participated in the school accreditation process at the secondary and community college levels since 1980. She holds a Master of Science degree from the University of California, Davis, in animal science.