Behind on Property Taxes in Florida: What Happens, and What Are Your Options?

Florida property taxes that go unpaid become delinquent on April 1, the tax collector sells a tax certificate on the unpaid amount on or before June 1 (or 60 days after delinquency, if later), and the certificate holder can apply for a tax deed two years after April 1 of the year the certificate was issued. Until a tax deed is issued, and unless a tax deed buyer has already paid the clerk in full, you can redeem the certificate by paying what is owed plus interest and costs (Fla. Stat. 197.472).

If your problem is a higher bill rather than an unpaid one, see a Florida property tax increase.

When do Florida property taxes become delinquent?

Taxes are due November 1 (or when the certified roll reaches the tax collector, if later) and become delinquent on April 1 of the following year, or 60 days after the original tax notice was mailed if that is later (197.333).

Once taxes are delinquent:

• Interest runs at 18 percent per year from the delinquency date until a certificate is sold, with a minimum charge of 3 percent if you pay before the sale (197.172(1)).
• An additional notice goes out by April 30 warning that a tax certificate may be sold (197.343(1)).
• The tax lien comes first. Florida property taxes are a first lien, superior to all other liens, from January 1 of the tax year until paid (197.122(1)). That includes your mortgage.

What is a tax certificate sale?

A tax certificate is a sale of the unpaid tax debt, not of your house. The tax collector advertises once a week for three weeks and then sells certificates on parcels with delinquent taxes (197.402(3)).

Bidders compete for the lowest interest rate, up to 18 percent; unsold certificates go to the county at the maximum rate (197.432(6); 197.172(2)).

You still own the property, and the holder may not contact you to demand payment until two years after April 1 of the year the certificate was issued (197.432(13)).

How do you redeem a tax certificate?

You can redeem a tax certificate at any time before a tax deed is issued, unless a tax deed buyer has already paid the clerk in full (197.472(1)). You pay the face amount plus interest at the rate bid (minimum 5 percent of face unless the bid was zero), costs, and a $6.25 fee (197.472(2)-(3)). Interest is calculated monthly (197.172(4)), so the tax collector can quote the figure for a given payment date.

When can a certificate holder apply for a tax deed?

A certificate holder can apply for a tax deed once two years have passed since April 1 of the year the certificate was issued (197.502(1)). If no one applies within seven years, the certificate is canceled (197.482).

After an application:

• The clerk records a notice of the application (197.502(5)(c)) and mails notice at least 20 days before the sale to the owner, mortgage holders and other lienholders of record (197.502(4); 197.522(1)(a)).
• On homestead property, the opening bid must include one-half of the latest assessed value (197.502(6)(c)), and that amount is treated as surplus after the sale (197.582(2)(a)).

A tax deed generally ends every other interest in the property, including the mortgage, with limited exceptions for certain government liens (197.552).

What does a mortgage servicer do when taxes go unpaid?

With an escrow account, the servicer must pay the taxes on time, advancing its own money if needed, as long as your mortgage payment is not more than 30 days overdue (12 CFR 1024.17(k)(1)-(2); 1024.34(a)). It may then seek repayment of the shortage from you; see escrow shortages.

If you pay your own taxes and Fannie Mae owns the loan, the servicer must advance an unpaid tax bill from its own funds, revoke the escrow waiver and set up an escrow account to collect the money back (Servicing Guide B-1-01). Other investors follow their own rules and your mortgage documents. Reverse mortgages have their own rules on unpaid taxes.

What options does Florida offer?

Two Florida tax collector programs may help, both with spring deadlines.

• Homestead tax deferral. A homeowner entitled to the homestead exemption can apply to defer the taxes above 5 percent of prior-year household income (3 percent at 65 or older), or the full amount if household income is under $10,000 (197.252). Apply each year by March 31 following the tax year (197.2423(1)). It is unavailable if total liens would exceed 85 percent of just value or the first mortgage exceeds 70 percent (197.2423(9)). Deferred taxes stay a priority lien and come due when ownership or use changes (197.2421(3); 197.263(1)).
• Installment plan. For taxes estimated above $100, you can apply by April 30 to pay that year’s taxes in four installments, due June 30, September 30, December 31 and March 31 (197.222(1)). It does not clear a past delinquency.

A HUD-approved housing counselor can review the tax bill and mortgage together at no cost; once a tax deed application is filed, a Florida attorney is the right adviser.

Can a sale pay delinquent property taxes?

Yes: when a Florida home is sold, delinquent taxes and outstanding tax certificates are normally paid from the sale proceeds at closing, because the tax lien ranks ahead of the mortgage (197.122(1)). Deferred taxes come due on a change of ownership, except a transfer to an eligible surviving spouse (197.263(1)).

In a short sale, the lender approves the settlement statement. On a Fannie Mae loan, the Servicing Guide lists real estate taxes prorated to closing as an allowable cost, and other amounts need Fannie Mae’s authorization (D2-3.3-01). See also can I sell my house if I am behind on payments.

Short Sale Guide connects homeowners with agents. Start with the free file checker, read the free Short Sale Guide, or call 855-725-3898.

This page is general information for Florida homeowners and is not legal or tax advice.