How to Manage Nebraska Tax Lien Investments

Investing in Nebraska tax liens is a great way to make money with relatively low risk. However there are several steps investors should take to protect their investment and prepare for the possibility of applying for a tax deed or foreclosing to take ownership.

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Purchasing a Tax Lien Certificate

Congratulations on purchasing a tax lien certificate! Now is the time to get organized so that you stay on top of what you’ll need to do over the coming years to ensure a successful investment experience. Document these important items, they will be needed in the coming years:

• Tax lien certificate. This document is evidence of your tax lien and contains several important pieces of information that you’ll need later.
• Date of tax sale. This is the date that the three year redemption period starts and determines when actions should be taken in the future.
• Property account number. This may also be called a parcel number, assessment number, or tax bill number. You’ll need this when making tax bill payments in the future.
• Payment receipt. Always retain documentation of payments you make in case there is a dispute over who made the payment later.

Notify Property Owner

After receiving the tax lien certificate, purchasers must notify property owners, by personal service, that a tax lien was sold on their property. Nebraska Revised Statute 77-1818 states:

Upon issuance of the certificate, the purchaser shall notify, by personal service, the property owner of the real property that was sold for taxes at the address listed for such owner in the records of the county assessor.

Download the Nebraska Notice of Tax Lien form, which contains language and information required by the statute.

Pay the Annual Tax Bill

Tax bills are mailed every December and due December 31.  Tax lien purchasers should wait until the bill becomes delinquent before paying. Nebraska Revised Statute 77-1818 states:

if after the taxes become delinquent he or she subsequently pays any taxes levied on the property, whether levied for any year or years previous or subsequent to such sale, he or she shall have the same lien for them and may add them to the amount paid by him or her in the purchase.

When paying a tax bill, always save your payment receipt, ideally showing the matching account number of property on the certificate, along with the date, your name, and the amount paid.

Applying for a Tax Deed

After the three year redemption period expires, before applying for a tax deed, a tax lien purchaser must:

1. Hire a registered abstractor to perform a title search, in order to determine who should receive notice. See Nebraska Revised Statute 77-1833.
2. Find addresses for the parties identified in the abstract to build a mailing list.
3. Use personal service or certified mail to delivery notice of the intent to apply for a tax deed. See Nebraska Revised Statute 77-1832.
4. If any person cannot be found, then a notice must be published in a newspaper of general circulation in the county where the property is located, for three consecutive weeks. See Nebraska Revised Statutes 77-1834 and 77-1835.

After three months from the latest date of service, including any newspaper publications, the tax lien purchaser may apply for a tax deed.  An affidavit proving service of notice must accompany the application.

A tax deed must be applied for within nine months of the expiration of the redemption period. See Nebraska Revised Statute 77-1837.

Nebraska Revised Statute 77-1837 also states:

The purchaser or his or her assignee may apply for a tax deed under this section if one hundred ten percent of the assessed value of the real estate described in the tax sale certificate, less the amount that would be needed to redeem such real estate, is twenty-five thousand dollars or less.

For properties where this limit is exceeded, the tax lien purchaser must foreclose the lien instead of applying for a tax deed.