Cindy Landa Cox: The problem of delinquent property taxes in Mohave County
Delinquent property taxes have been and continue to be a serious issue in Mohave County. My office will be holding its annual tax lien sale earlier than in prior years, and I’d like to take this opportunity to highlight some positive changes concerning this year’s sale. Effective Oct. 15, 2018, the Board of Supervisors approved changing the County’s authorized provider for Internet Tax Lien Auction Services to Realauction.com, utilizing a Cooperative Contract with Maricopa County. One benefit to Tax Lien investors is a reduction in the vendor assessed per parcel processing fee; this fee decreased from $10 to $5 per parcel under the new contract.
Unpaid real estate taxes on real property in Mohave County for the 2017 tax year (and prior years) was published beginning Jan. 23, 2019, in The Standard. Investor registration and bidding for the annual tax lien sale began the same day atmohave.arizonataxsale.com and continues through the close of the sale on Feb. 8.
There are several benefits to holding a tax lien sale. Allowing others to pay delinquent taxes through the auction process in exchange for a tax lien relieves all taxpayers countywide of having to make up the difference or suffer reduced services. Because of the competitive bidding process, the property owner often receives a reduced interest rate on delinquent taxes. Lastly, the bidder or investor can earn a higher than market return on investment with a small initial cost per parcel. As you can see, the annual tax lien sale benefits the county, its taxpayers, and investors.
Last year, my office held a public workshop prior to the Tax Lien Sale. The workshop is archived and available on the County’s YouTube channel for viewing. Although we have changed auction providers, the registration and bidding processes are very similar to prior years. Frequently asked questions are available on the Treasurer’s Office website at mohavecounty.us.
Keep in mind that a tax lien sale is simply offering at public sale the opportunity for someone else to pay delinquent property taxes on the owner’s behalf in exchange for a lien on the property. It is NOT an outright sale of property. If you are interested in purchasing property outright, a Tax Deed Sale is better suited to your needs. (BOS Tax Deed Sale held by the Clerk of the Board is set for April 8, 2019)
A Tax Deed Sale is the sale of real property by the BOS in the county to the highest bidder for cash. Last Spring, the BOS applied for Treasurer’s Tax Deeds on just over 800 parcels and approved $150,000 in funding to cover the costs of the Tax Deed process. I am proud to report that cost savings measures by my office allowed for deeding these parcels at just a fraction of initial cost estimates (spent approximately 8 percent or $11,500 of the funding). Even better, owners of 81 parcels chose to redeem (pay all taxes, fees and penalties owing) rather than lose their properties to foreclosure. As a result, over $86,000 was collected in delinquent tax revenue. Keep in mind this is before a single parcel has been presented to the public for sale. Tax deeding of these parcels resulted in administrative savings of several thousand dollars a year. Once all parcels are back on the active tax rolls the County should see additional tax revenue of approximately $70,000 a year.
Due to the fiscal success of this initiative in 2018, the BOS approved an additional 5,000-plus parcels for tax deed Processing in 2019. Annual administrative savings upon completion of the 2019 tax deed process will be $15,000. These parcels will be offered at a future tax deed sale resulting in additional tax revenue of approximately $200,000 annually.