An annual Tax Lien Sale is held to collect the unpaid taxes. These taxes are purchased by investors who, in turn, earn interest on the tax liens against these properties. The interest amount (paid on the tax lien but not on the premium) is determined on September 1 each year and is nine percent above the federal discount rate (rounded up).
The amount of the individual tax lien(s) purchased includes the amount of tax, delinquent interest (through December) plus advertising, and certificate fees. Generally a successful bidder pays a premium price above the tax liens that are sold in order to purchase a tax lien certificate.