What is a Tax Lien?
Property taxes are used to finance parts of the local government such as schools, police, fire, roads, and other things.
If property taxes are not paid by the homeowner, the tax lien is sold to an investor. In Arizona, the tax liens are sold in February using an interest rate bid down method. That means the interest rate starts off higher, and if the investor, or certificate purchaser, is willing to take a lesser interest rate, they will continue to bid down. This helps the homeowner by not having a massively high interest rate on the tax lien. The homeowner can redeem the tax lien as long as it has not gone through the foreclosure process.
To redeem the tax lien, the homeowner would go to the Maricopa County Treasurer website, put in their parcel number, and then pay the tax liens online. The tax lien would include the principle of the taxes and whatever interest has accrued.
After the tax lien investor, or certificate purchaser, has owned the tax lien for 3 years, they may open a tax lien foreclosure. Typically, tax lien foreclosures take three to four months. At any time during the foreclosure, the homeowner can pay off all tax liens and the attorney fees to stop the foreclosure. If the foreclosure goes all the way through without being paid, be tax lien investor/certificate purchaser, will own the property and the owner has no redemption right. This means they can no longer pay back the taxes.
