Effective January 1, 2026, Louisiana transitioned to a true tax lien system. Investors now purchase a first-priority lien by paying the tax debt rather than a fractional ownership interest in the property.
This guide explains how Louisiana tax lien certificates work, how investors earn interest when liens are redeemed, and how to enforce the lien if the property owner fails to redeem.
A tax lien is a claim secured with real property. If the property owner redeems the lien, the investor gets back their money plus interest. If not, the investor may acquire the property.
The winning bidder is the bidder who will accept the lowest rate of interest that the property owner will be required to pay in order to redeem the property.
The interest rate is based on the winning auction bid, from 1% to 0.7% per month, non-compounding, on the tax debt sold. In addition, a one-time 5% penalty is added at the time of sale.
The tax debor has three years to redeem the property by paying the termination price of the lien. A suit to enforce the lien can be filed by the lien holder after three years from the date the lien was recorded.
The tax lien expires seven years from the date the lien was recorded. A proceeding to enforce the lien should be initiated before the expiration to preserve your rights as the lien holder.
Revisions to the laws governing tax sales in Louisiana took effect on January 1, 2026. These changes alter everything from the way investors bid at auction to the rights available if a property owner fails to redeem the property.
The law in place at the time of the tax sale determines the process you should follow as an investor. As a result, the changes apply only to tax liens purchased at auction on or after January 1, 2026. Read our guide on investing in Louisiana tax sale certificates (pre-2026) for information about older tax sale investments.
Investors no longer bid down the percentage of ownership they are willing to accept for the tax debt owed. Instead, investors bid down the interest rate the property owner must pay to redeem the property. Bidding starts at 1% per month and decreases to 0.7% per month in 0.1% increments.
The interest rate on a Louisiana tax lien certificate is determined at the tax lien auction. Investors bid down the interest rate the property owner must pay to redeem the property, starting at 1% per month and decreasing to 0.7% per month in 0.1% increments. The interest rate is non-compounding.
If the property owner redeems the lien, the investor receives the principal amount paid at the tax sale plus 5% and the interest rate established at the auction.
Previously, if you won a tax sale certificate at a tax sale, you had the right to pursue ownership of the property if it was not redeemed within three years through a quiet title process.
Under the new system, investors purchase a tax lien certificate. This does not grant the lienholder any ownership rights in the property. Instead, the investor becomes a creditor holding a lien that takes priority over all other security interests except prior tax liens.
To terminate the lien, previously known as a redemption, the property owner must pay the tax collector, not the lienholder. The collector calculates the termination price, which generally includes:
After the termination price is paid, the tax collector should distribute the funds to the lienholder within 30 days
Yes. The property owner will continue to receive a tax bill each year. If subsequent year tax bills go unpaid, those taxes may be sold at future tax lien auctions. Investors can request to receive tax bills and notices from the tax collector for a fee.
Investors can pay subsequent year tax bills starting on the date the bill becomes delinquent. Paying the bill before this date may prevent the investor from receiving interest or recouping the payment.
The subsequent year tax debt will become part of the obligation owed to the investor along with a 5% penalty and 1% per month interest, non-compounding (LA RS 47:2160.1).
The same three-year redemption period still exists to give the property owner time to pay the tax debt. After the redemption period expires—and at least six months after providing notice—the lienholder may file suit to foreclose through an ordinary proceeding.
Lienholders must provide notice to all “tax lien auction parties,” which include:
Tax lien investors must provide the tax collector with an affidavit of noticing costs, of which up to $500 may be recovered (LA RS 47:2156). These noticing costs will be added by the tax collector to the termination price of the lien.
There are two critical time windows that affect when notice and enforcement actions can occur:
Taking both of these time windows into account means that:
After the redemption period expires—and at least six months after providing notice—a lienholder may foreclose through an ordinary proceeding. This is a standard judicial foreclosure process available to creditors in Louisiana.
No. If the lienholder forecloses, the sheriff will conduct a foreclosure sale. If you bid and win at that auction, you may acquire ownership of the property. However, holding the tax lien certificate itself does not grant any right or privilege to assume ownership of the property.
Lienholders have seven years from the date the tax lien certificate was recorded to file an action to enforce the lien.