If the taxes aren’t paid, a tax lien is put on it...and after a period of time it is sold off by the county, for at least the amount of the tax lien. For this reason, most banks will pay taxes. However, the process takes around two years...so a bank or insolvent developer can essentially borrow money at very low interest by delaying tax payments. When I look at the past due tax rolls, I see that many started this game in 2009...so here in 2011 they will pay the ‘09 tax, but not ‘10, and the actual ‘11 taxes won’t get paid until ‘13. I look at the late tax rolls as what should be the first predictor that real estate is getting better. So far, however, the late rolls just are getting longer, and commercial property is really starting to show up.
Not in Kentucky. The state mandates 12% annual interest, accruing at 1% per month. If you can buy the tax bill on a property with a clean title, and can afford to wait, it's a great return.