Tax Lien Statistics and Facts

Tax Lien Statistics 2024-2023

Highlights:

• Approximately 98% of property owners redeem their properties before tax lien foreclosure​​.
• The maximum interest rate on tax liens in Maricopa County is capped at 16%​​.
• Tax lien investing’s high ROI of 240% is fixed and not subject to market fluctuations​​.

Key Tax Lien Facts

1. State-specific interest rate limits are set during tax lien auctions​​.
2. Tax lien certificates are predominantly purchased by members of the National Tax Lien Association (NTLA), accounting for 80% of sales​​.
3. The National Tax Lien Association (NTLA) is a prominent organization in the tax lien industry, founded in 1997​​.
4. The NTLA offers educational programs and credentials like Certified Tax Lien Professionals (CTLP®)​​.
5. Tax lien and deed investors, lenders, fund managers, and tax servicers are primary attendees at NTLA conferences​​.
6. Maricopa County, Arizona, recorded tax lien sales statistics from 1995 to 2006​​.
7. Parcels may become state liens if the tax lien is not purchased at the sale, termed “struck to state.”
8. Tax liens sold to Certificate of Purchase (CP) buyers are held until they are paid off or foreclosed​​.
9. Redeemed liens in Maricopa County include liens from tax sales, subtax, and assignment​​.
10. In Maricopa County, liens not auctioned due to pending litigation, like bankruptcy, are also recorded​​.
11. A federal tax lien is a legal claim by the government on property for unpaid tax debts​​.
12. Federal tax liens protect the government’s interest in all types of property​​.
13. Once the IRS assesses a balance due to a federal tax lien exists
14. The IRS offers various forms and instructions for individual tax returns, such as Form 1040​​.
15. Avalara, a tax and technology expert, made predictions for 2024, emphasizing automation and AI in tax solutions​​.
16. Social commerce is expected to grow significantly in the retail sector in 2024​​.
17. Omnichannel commerce is predicted to become essential for seamless shopping experiences across platforms​​.
18. Tax audits are anticipated to increase in 2024 as state budgets tighten​​.
19. Marketplace tax regulations are expected to expand in 2024​​.
20. Artificial intelligence is forecasted to play a more significant role in tax-related matters​​.
21. Tax lien investing involves various steps, including attending auctions and potentially initiating foreclosure processes​​.
22. Tax lien investment requires careful consideration of the certificate expiry date and foreclosure provisions​​.
23. Investing in tax liens can yield high returns but carries risks like bankruptcy or invalid certificates​​.
24. Tax lien investing is not always aimed at property ownership, as owners redeem most liens​​ from construction notice holders.
25. Passive investment in tax liens through institutional investors or fund managers is a viable option​​.
26. The tax lien investment process involves researching properties, attending auctions, and ensuring compliance with legal provisions​​.
27. Investors in tax liens can earn significant interest rates, depending on the bidding process​​.
28. The resolution of a tax lien typically results in lumpsum returns, including principal and interest​​.
29. Low capital requirement is a key advantage of tax lien investing​​.
30. Tax lien investment requires due diligence in property selection and legal compliance​​.

Tax Lien Investing Outlook and Trends for 2024

In 2024, a significant portion of tax lien certificates, about 80%, are purchased by members of the National Tax Lien Association (NTLA), highlighting the dominance of this group in the market. This is particularly notable considering that approximately 98% of property owners usually redeem their properties before foreclosure. Tax lien investing carries inherent risk, even though it is lucrative…such as bankruptcy or the invalidation of certificates. The process requires careful consideration of legal provisions, including the expiration date of tax lien certificates and foreclosure procedures.

Despite these risks, tax lien investing is characterized by low capital requirements and the potential for high fixed interest rates unaffected by market fluctuations. Regarding geographic distribution, Maricopa County in Arizona has provided detailed statistics on tax lien sales statistics, revealing trends such as the maximum interest rate cap at 16% and the incidence of parcels becoming state liens if not purchased at the sale. The NTLA, established in 1997, plays a crucial role in the industry, offering education and training for professionals and advocating for the interests of various stakeholders in the tax lien sector.

Cited Sources

1. Tax Lien Investing in 2024: A Guide for New Investors
2. Understanding a Federal Tax Lien | Internal Revenue Service
3. Tax and technology in 2024: Experts from Avalara make their predictions
4. NTLA 2024 Annual Conference & Meeting
5. Tax Lien Statistics – Treasurer of Maricopa County