Tax Lien Sales in Nebraska

Tax lien certificate auctions, referred to as Delinquent Property Tax Sales, are held in Nebraska in March of each year. The properties up for auction include all tax defaulted real estate with the exception of mobile or manufactured homes or cabin trailers on leased lots. You don’t need to be a Nebraska resident to bid on these tax lien certificates.

Nebraska law states that the sale can be either an annual event or the properties could be sold one per day, if the county wishes. All tax lien certificates are offered at a good 14 percent interest rate.

If there is no competition for a tax lien certificate, the bidder is awarded the property. However, when more than one bidder is vying for a specific parcel, the auction process then becomes what is referred to as “bid down the ownership”. In this case, the bidding is for a percentage interest in the property. Whoever offers to accept the smallest portion of an undivided parcel in exchange for paying the defaulted taxes plus fees is the winner. What this amounts to for the tax lien investor is that they will receive the appropriate percentage of the profits when the property sells. The investor becomes partners with the property owner; if the investor has an interest in the biggest portion of the parcel, then he becomes the person in control of its disposition.

When you are the winning bidder, you will receive a tax lien certificate that includes a description of the property, the amount you paid for it, and the date by which the owner must redeem the certificate by paying the taxes plus interest. You must pay the property taxes in subsequent years until redemption, thereby increasing the value of your tax lien certificate.

The property owner is given ample opportunity to remove the lien from their parcel. At any time during the three-year redemption period, the titleholder can pay the past due taxes plus all fees to the holder of the certificate and regain their real estate free and clear of the lien encumbrance. However, if the owner never steps forward to reimburse the cost of the property tax, the tax lien certificate buyer can foreclose and receive a deed to the real estate. In order to foreclose, the tax lien investor must give several notifications to the owner; these must occur within very strict time limits.

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