Five investors buy most of the tax certificates

A pattern has emerged three years into the tax collector’s decision to move the annual sale of certificates for delinquent taxes off of the courthouse steps, so to speak, and entirely online.

Based on results of the online sale that wrapped up Saturday, May 28, the average interest rate on the certificates has dropped, and most are being bought up by a handful of private investors.

“The average interest awarded was 3 percent,” said Tax Collector Rick Watson. “Interest awarded has been on a downward trend for several years.”

The online auction differs from the live auction in terms of the back-and-forth between bidders. In the live format, bidders sit in a room, and watch as bidders bid downward on the interest rate they are willing to accept from a starting point of 18 percent.

In the online format, bidders put in their bid anytime during May, and are not aware of what the other bidders are offering, only that other bids have been placed, until the lowest bid is announced.

Watson said that of the 825 certificates available for sale, 749 certificates were sold to individuals, while 76 certificates did not sell and reverted to the county. This ratio means that 95.9 percent of the certificates were sold to private investors. 

The tax certificates amounted to a total of $952,840 in delinquent taxes, which represented about 3 percent of the $29.18 million in 2021 property taxes assessed in Franklin County by the seven taxing authorities.

Watson said that of the county’s roughly 18,500 real estate parcels, the number which were delinquent was consistent with past years. “Four percent of the parcels are normally delinquent each year,” he said. 

Private investors purchased $914,000 of these delinquent tax certificates, and $38,840 reverted to the county, he said.

Of the 63 entities that signed up to participate in the auction, 30 of them placed bids and each one of them secured at least one certificate.

Five private investors purchased 54 percent, or 447, of the available certificates. The number of certificates of the five largest purchasers ranged from 47 to 172 certificates apiece, Watson said.

The certificates that revert to the county are handled the same way other certificates are handled. In 22 months, the county can apply for a tax deed, a process that allows the owner of the property to pay back taxes and remove the lien, by redeeming the certificate, on his or her property up until the time of the sale on the courthouse steps. 

Historically, the county has waited until the seven- year period to apply for tax deeds on the certificates it holds. In the last couple of years, Franklin County has obtained tax deeds on over 200 lots in Carrabelle, but the properties have not been sold off or developed.