How Much Does it Cost to Redeem Tax Sale Property in Georgia?

If you find yourself behind the Eight Ball and the County has sold your house or property to a third party for nonpayment of taxes, don’t despair. You can redeem your property unless and until the purchaser bars the right of redemption (foreclosure of the right of redemption). Until the foreclosure of your ownership is barred, you can redeem your property. However, it is expensive.

The Georgia Code allows the tax deed purchaser interest of 20% the first year and 10% for each year, or fraction of a year, thereafter.

Lets look at a redemption example:

Suppose your house is worth $200,000 and you haven’t paid the taxes on it in two years. The taxes are $4,000 per year.

Lets assume your house goes to tax sale and a buyer purchases it for $30,000.00 and the unpaid taxes for 2 years of $8,000.00 is included in the purchaser's bid. Pretermitting the discussion on how to make money on the “excess proceeds,” the tax sale purchaser bought your house via tax deed for $30,000.00.

The next year the purchaser pays the your tax, another $4,000, and writes you a letter telling you he is foreclosing the tax deed. He then publishes in the legal newspaper to foreclosure your ownership. [You have been living in your house the entire time.]

How much do you have to pay to stop his tax foreclosure?

$30,000.00, the amount paid at the sale,

Plus 20% for the first year,

$6,000.00

Plus 10% for each year or fraction of a year thereafter,

$3,000.00,

Plus the additional taxes paid by the purchaser in the 2nd year after the tax sale,

$4,000.00,

Plus the publication and costs of publication, if redemption occurs more than 30 days after Notice,

$500.00 (approximate – this quote is, perhaps, high).

So, the grand total to get your tax sale house out of tax deed hock, is $43,500.00 -- all because you failed to pay your $4,000 tax per year. Ouch.

You must get the cash or cash equivalent funds to the tax purchaser “before” the date stated in the Notice passes. If you go beyond the date – its curtains for your title and ownership.

The relevant statutes are listed at then end of this article.

Hugh Wood
Atlanta, GA


Note: This is a really basis analysis of the redemption. A bank escrow, which is likely on even a $200,000 house, would stop the tax foreclosure. It is probable that the bank would foreclose on your unpaid mortgage balance before the County reached the sale of your tax deed. Each redemption is different and the minutiae of the numbers seem hard to calculate. [I have fought with folks over whether they had to pay the Certified Mail costs to redeem.]

& & &

CODE OF GEORGIA
Title 48. REVENUE AND TAXATION
Chapter 4. TAX SALES
Article 3. REDEMPTION OF PROPERTY SOLD FOR TAXES
Current through 2008 Legislative Session


O.C.G.A. § 48-4-40. Persons Entitled To Redeem Land Sold Under Tax Execution; Payment; Time.

Whenever any real property is sold under or by virtue of an execution issued for the collection of state, county, municipal, or school taxes or for special assessments, the defendant in fi. fa. or any person having any right, title, or interest in or lien upon such property may redeem the property from the sale by the payment of the redemption price or the amount required for redemption, as fixed and provided in Code Section 48-4-42:
(1) At any time within 12 months from the date of the sale; and
(2) At any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in Code Section 48-4-45.

O.C.G.A. § 48-4-41. Redemption By Creditor Without Lien.

If the property is redeemed by a creditor of the defendant in fi. fa. who has no lien, the creditor shall have a claim against the property for the amount advanced by him in order to redeem the property if:
(1) There is any sale of the property after the redemption under a judgment in favor of the creditor; and
(2) The quitclaim deed is recorded as required by law.

O.C.G.A. § 48-4-42. Amount Payable For Redemption.

The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments on the property, plus a premium of 20 percent of the amount for the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year thereafter. If redemption is not made until more than 30 days after the notice provided for in Code Section 48-4-45 has been given, there shall be added to the redemption price the sheriff's cost in connection with serving the notice and the cost of publication of the notice, if any. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser's successors.


O.C.G.A. § 48-4-43. Effect Of Redemption.

When property has been redeemed, the effect of the redemption shall be to put the title conveyed by the tax sale back into the defendant in fi. fa., subject to all liens existing at the time of the tax sale. If the redemption has been made by any creditor of the defendant or by any person having any interest in the property, the amount expended by the creditor or person interested shall constitute a first lien on the property and, if the quitclaim deed provided for in Code Section 48-4-44 is recorded as required by law, shall be repaid prior to any other claims upon the property.

O.C.G.A. § 48-4-44. Quitclaim Deed By Purchaser.

(a) In all cases where property is redeemed, the purchaser at the tax sale shall make a quitclaim deed to the defendant in fi. fa., which deed shall recite:
(1) The name of the person who has paid the redemption money; and
(2) The capacity in which or the claim of right or interest pursuant to which the redemption money was paid.
(b) The recitals required by subsection (a) of this Code section shall be prima-facie evidence of the facts stated.
(c) If the quitclaim deed provided for in subsection (a) of this Code section is presented to the purchaser at the time such person accepts the amount payable for the redemption in the form of cash or a certified check, the purchaser shall, at that time, sign the quitclaim deed if a notary public and an unofficial witness are present to witness such signature.
(d) If no quitclaim deed is presented at the time of the redemption or if sufficient witnesses are not present, it shall be the responsibility of the purchaser to prepare and properly execute such quitclaim deed as is required by law within seven days from the date of the redemption.
(e) It shall be the responsibility of the purchaser once the quitclaim deed is properly executed as required in subsection (d) of this Code section to present such deed for recordation to the clerk of the court within ten days of the redemption. The quitclaim deed shall be presented for recordation in the county where the tax sale originally occurred. The purchaser shall pay all recording costs and return the recorded quitclaim deed to the redeemer.
History. Amended by 2006 Ga. Laws 759, O.C.G.A. §6, eff. 7/1/2006.

O.C.G.A. § 48-4-45. Notice Of Foreclosure Of Right To Redeem; Time; Persons Entitled To Notice.

(a) After 12 months from the date of a tax sale, the purchaser at the sale or his heirs, successors, or assigns may terminate, foreclose, divest, and forever bar the right to redeem the property from the sale by causing a notice or notices of the foreclosure, as provided for in this article:
(1) To be served upon all of the following persons who reside in the county in which the property is located:
(A) The defendant in the execution under or by virtue of which the sale was held;
(B) The occupant, if any, of the property; and
(C) All persons having of record in the county in which the land is located any right, title, or interest in, or lien upon the property;
(2) To be sent by registered or certified mail or statutory overnight delivery to each of the persons specified in subparagraphs (A), (B), and (C) of paragraph (1) of this subsection who resides outside the county in which the property is located, if the address of that person is reasonably ascertainable; and
(3) To be published, if that tax sale occurs on or after July 1, 1989, in the newspaper in which the sheriff's advertisements for the county are published in each county in which that property is located, which publication shall occur once a week for four consecutive weeks in the six-month period immediately prior to the week of the redemption deadline date specified in the notice.
(b) Nothing contained in this Code section shall be construed to require that any notice be sent to or served upon any person whose right, title, interest in, or lien upon the property does not appear of record in the county in which the land is located.
(c) The heirs of any deceased owner of any land entitled to notice pursuant to this Code section shall be served by the sheriff or notified as provided in this article.

O.C.G.A. § 48-4-46. Form Of Notice Of Foreclosure Of Right To Redeem; Service; Time; Return And Record; Waiver.

(a) The notice provided for in Code Section 48-4-45 shall be written or printed, or written in part and printed in part, and shall be in substantially the following form:
Take notice that:
The right to redeem the following described property, to wit:
______ will expire and be forever foreclosed and barred on and
after the ______ day of ______________, ____.
The tax deed to which this notice relates is dated the ______ day
of ______________, ____, and is recorded in the office of the
Clerk of the Superior Court of ________ County, Georgia, in Deed
Book ____ at page ____.
The property may be redeemed at any time before the ______ day of
______________, ____, by payment of the redemption price as fixed
and provided by law to the undersigned at the following address:
___________________________________________________________________.
Please be governed accordingly.
_______________
(b) The purchaser at the tax sale or his heirs, successors, or assigns, as the case may be, shall make out an original notice in substantially the form prescribed in subsection (a) of this Code section and one copy of the notice for each person to be served with the notice. The purchaser shall deliver the notice and the copies together with a list of the persons to be served to the sheriff of the county in which the land is located not less than 45 days before the date set in each notice for the expiration of the right to redeem. Within 15 days after delivery to him, the sheriff shall serve a copy of the notice personally or by deputy upon each of the persons included on the list furnished him who reside in the county.
The sheriff shall make an entry of the service on the original copy of the notice. Leaving a copy of the notice at the residence of any person required to be served with the notice shall be a sufficient service of the notice.
(c) If the sheriff personally or by deputy makes an entry that he is unable for any reason to effect service upon any person required to be served, the person who requested that the service be made shall forthwith cause a copy of the notice to be published once a week for two consecutive weeks in the newspaper in which the sheriff's advertisements for the county are published, unless that notice is being published as provided in paragraph (3) of subsection (a) of Code Section 48-4-45. Either publication shall operate as and for all purposes shall be treated as service upon all persons as to whom the sheriff has made an entry that he has been unable to effect service.
(d) Each original notice together with the entry of the sheriff on the notice shall be returned to the person by whom the service was requested upon the payment of the sheriff's costs as provided by law. Any original notice together with the entries on the notice may be filed and recorded on the deed records in the office of the clerk of the superior court of the county in which the land is located.
(e) Service of notices as provided in this Code section may be waived in writing by any person required or entitled to be served with the notice.

O.C.G.A. § 48-4-47. Tender Of Redemption Price Before Action To Cancel Tax Deed.
(a) After notice to foreclose the right of redemption as provided for in this article has been given, no action shall be filed, allowed, sanctioned, or maintained for the purpose of setting aside, canceling, or in any way invalidating the tax deed referred to in the notice or the title conveyed by the tax deed unless and until the plaintiff in the action pays or legally tenders to the grantee in the deed or to his successors the full amount of the redemption price for the property, as provided for in this article.
(b) Subsection (a) of this Code section shall apply unless it clearly appears that:
(1) The tax or special assessment for the collection of which the execution under or by virtue of which the sale was held was not due at the time of the sale; or
(2) Service or notice was not given as required in this article.

O.C.G.A. § 48-4-48. Ripening Of Tax Deed Title By Prescription.
(a) A title under a tax deed properly executed at a valid and legal sale prior to July 1, 1989, shall ripen by prescription after a period of seven years from the date of execution of that deed.
(b) A title under a tax deed executed on or after July 1, 1989, but before July 1, 1996, shall ripen by prescription after a period of four years from the execution of that deed. A title under a tax deed properly executed on or after July 1, 1996, at a valid and legal sale shall ripen by prescription after a period of four years from the recordation of that deed in the land records in the county in which said land is located.
(c) A tax deed which has ripened by prescription pursuant to any provision of this Code section shall convey, when the defendant in fi. fa. is not laboring under any legal disability, a fee simple title to the property described in that deed, and that title shall vest absolutely in the grantee in the deed or in the grantee's heirs or assigns. In the event the defendant in fi. fa. is laboring under any legal disability, the prescriptive term specified in this Code section shall begin from the time the disabilities are removed or abated.
(d) Notice of foreclosure of the right to redeem property sold at a tax sale shall not be required to have been provided in order for the title to such property to have ripened under subsection (a) or (b) of this Code section.

Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084

Phone: 404-633-4100
Fax: 404-633-0068

http://www.woodandmeredith.com/h
wood@woodandmeredith.com