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Past News Briefs



06/05/08 - BARTOW

Delinquent Property Owners Will Pay More This Year.

The 2008 Tax Certificate Sale was successfully completed by the Tax Collectors Office on May 30th.

Tax Certificate sales were established in Florida as a way for taxpayers to protect their property for a two year period if they were unable to pay their property taxes. Under this system, delinquent taxes are paid by an investor and the investor earns interest on those taxes at a rate up to 18%. There is no guarantee that an investor will ever receive interest or the principal because there is no guarantee that the taxpayer will pay the delinquent taxes.

In 2008, Tax Collector Joe G. Tedder estimated a larger increase in delinquent taxes based on the economy and the current housing market in Polk County and Florida. This year delinquent taxes represented 6.5% of the total tax roll compared to 4.6% last year. This is good news for Polk County, as the increase was smaller than had been expected.

The slowing economy seems to have had a bigger impact on the weighted average interest rate and actual number of tax certificates sold. Last year all but $450,000 of outstanding tax certificates were sold, while this year $5.7 million in tax certificates were still available after the sale. Also, the weighted average interest rate rose from 3.3% last year to 10.4% this year.

These numbers seem to reflect a reduction in the availability of credit and other funds used to invest in tax certificates, which seemingly reduced competition, causing an increase in interest rates. This is good for investors, but increases the delinquent taxpayers overall tax liability.

A greater amount in outstanding tax certificates, totaling $5.7 million, may generate some worries over cash flow for Polk's taxing authorities, but Tedder indicated that this should not be a cause for concern because taxing authorities lawfully only budget 95% of their projected revenues; leaving them with 5% of their budgets uncommitted. The $5.7 million falls well below that 5% threshold.


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