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 auction price starts at a base amount of taxes, interest, costs, and other fees. Bidders compete by offering higher premiums over the minimum bid, with the highest bid winning.
The interest rate is typically 6%, but can be set locally in each county by the local government.
The tax debtor has six months to pay the delinquent property tax, interest, costs, and fees to redeem the property.