Saving Money with Government Tax Foreclosure Properties

Government Tax foreclosure properties are fine examples of distressed properties sale. Government tax foreclosure properties take place in any area, locality, county or State of the U.S. nation and therefore the opportunity to buy from these Government tax foreclosure properties is very wide nationally.

How investments in Government tax foreclosure properties can be profitable and how much of profit can an investor expect? Well - to speak the truth, investment in Government tax foreclosure properties amount only cents on dollars and the returns for these cents are in dollars. Governments of any country can run only on taxes collected from the citizens and like any other country the revenue of tax collected on real estate properties is huge in millions.

These taxes levied by the federal and local governments based on the assessment value of the real estate properties have a legal priority over any other dues like mortgage loans, second and subsequent mortgages and so on. Therefore Courts attach top priority in enabling the government authorities to collect the tax dues by ordering the payment either by disposal of the properties or transfer of the responsibility to some others, who come forward to pay the dues and collect the same over a period with interest from the property owners. As such Government tax foreclosure properties are available for investing in two ways.

The Internal Revenue Service (IRS) issues notice of Government Tax Lien on property owners who have defaulted in payment of the taxes due to the Government. A grace time of 10 days is allowed for the property owner to pay the dues as demanded by the notice. If not responded, a Public Notice of Government Lien is published for the information of the public and the property along with any other movable and immovable property of the defaulter is attached for recovery.

This is the first step of Government tax foreclosure properties. The Government Tax Lien Certificate filed in the local Court empowers the government authorities to confiscate the property through the Court order and dispose them to any buyer through public auction. (Similar to the foreclosure process of mortgage lenders).

The Tax Deed sale takes place to dispose off the delinquent property by public auction and the minimum bid is the amount of tax due along with administration charges and other expenses as well as interest accumulated thereon. Thus Government tax foreclosure properties are available for buying for a fraction of their value, enabling enormous savings on the price. The successful bidder is awarded the deed of the property with certain restrictions for certain periods, during which the original owner can redeem the property by clearing of the total amount of the dues to the present owner. After the lapse of this temporary deed, an absolute deed of ownership of the property is awarded.

There is another way of investing in Government tax foreclosed properties wherein a Tax Lien Certificate on the property is auctioned for outright sale by bidding or for bidding the lowest interest rate, according to the prevailing foreclosure laws in the State.

If not redeemed by the owner within certain time, the bidder gets the ownership of the property in entirety. Thus looking from any angle, Government tax foreclosure properties can return high margins on investments made running to thousands of dollars.

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