Arizona Property Tax Lien Law – Redemption

Property Tax Lien Law

Arizona Property Tax Lien Law

What are the consequences of failing to pay your Property Taxes in Arizona? 

If you fail to pay your Arizona property taxes, you run the risk of losing ownership of your real property if you don’t make up the payments. 

If you own real property in Arizona, the state stru tures laws in a way that you could potentially lose your home if you fail to catch up on your delinquent property taxes. If you fail to pay your property taxes, the county is granted a lien on your home. The county is then authorized to sell the lien to investors, after a certain time period, the investor is permitted to start procedures to take ownership of your property through foreclosure or other legal processes. 

What Is a Property Tax Lien? 

People who purchase real property are required to pay property taxes. The county then uses the money from paid property taxes to pay for schools, public buildings, public services, roads, and parks. The amount of property taxes that a landowner is required to pay is based on what the county deems is the assessed value of the property. 

In Arizona, when landowners fail to pay their assessed property taxes, the delinquent amount becomes a tax lien on the property. If the count places a tax lien on your home, the taxing authority is allowed by statute to hold a tax lien auction wherein the delinquent tax debt is sold to an investor. 

County Tax Lien Sales In Arizona 

In Arizona, each county holds a tax lien sale/auction in February of each year. See Ariz. Rev. Stat. § 42-18112. At the auction, investors bid on the interest rate that will be paid to them if they pay the delinquent taxes to the county. The interest rate bidding starts at 16%. The next bidder may offer to pay the taxes and only receive 14% and so on until there is a winning bidder. It is important to note that the winning bidder does not receive immediate title to the property. The purchaser does receive ownership of the tax lien and receives a Certificate of Purchase. Holding this Certificate of Purchase will allow the investor to collect the tax debt from the landowner and the right to foreclose on the property at a later date.  

As previously mentioned, the winning bidder at the sale will be the one who offers the lowest rate of interest received if they pay the taxes. See Ariz. Rev. Stat. § 42-18114. If the landowner fails to redeem the Tax Certificate by paying the amount of the lien plus interest, the investor can foreclose the Certificate of Purchase and obtain title your home. 

At the County auction, if no investor bids on the lien, the county treasurer will assign the lien to the state of Arizona. See Ariz. Rev. Stat. § 42-18113. The state then is authorized to apply to the county for a title to your property if you fail to redeem your tax debt.  

Notice of a Tax Lien Sale 

On or before September 1st of each year, the county treasurer will mail you, the landowner, a notice about your delinquent property taxes against the real property. 

What is the redemption period to pay your delinquent property taxes? 

If an investor purchases your delinquent taxes at the auction, you receive a three-year redemption period to pay off the tax debt and keep a title to your home. See Ariz. Rev. Stat. § 42-18152.  

After the three years, the investor that purchased the lien at the tax sale and obtained a Certificate of Purchase is authorized by the State of Arizona to initiate foreclosure proceedings against your property. The investor is required to send you a 30-day notice asking you to redeem your taxes. If you fail to redeem your taxes, the investor is then further authorized to file a complaint and ask for judgment against your property. If the investor receives a judgment because you failed to redeem the taxes, they can record the judgment, thus obtaining a title to your property. If you pay your taxes after you were served with a complaint, the statutes state that you are obligated to pay the investor the taxes they paid, the interest that has accrued and, the investor’s reasonable attorney’s fees and costs.  

If the purchaser of the tax lien does not initiate an action to foreclose their right to redeem their tax certificates within ten years, the lien becomes void, and their right to foreclose is terminated. 

If you have a certificate of purchase that you would like to foreclose on or if you received a notice from an investor attempting to foreclose on your property, please call our firm. 


Arizona Property Tax Lien Law