The Maryland Tax Sales Are Going on Now!

Did you know that the redemption period in Maryland is only 6 months? Maryland tax sales take place in May and June each year.

The state of Maryland has a unique bidding procedure for tax liens. Premium is bid at the auction, but you don’t pay all the premium at the tax sale. Most of the counties collect “high bid premium” in addition to the lien amount at the tax sale. The winning bidder doesn’t pay the entire premium amount unless the lien does not redeem. The entire bid amount must be paid to receive the deed to the property after a tax lien foreclosure.

What is High Bid Premium?

High bid premium is actually a very small amount of what is bid. If the winning bid is less than 40% of the assessed value of the property, no high bid premium is collected. The entire premium only needs to be paid if the lien is foreclosed.

High bid premium is calculated as 20% of the difference between the bid amount and 40% of the assessed value of the property. Here’s an example for a property assessed at $100,000. If the winning bid is $50,000 premium, the investor pays the face amount of the lien + $2,000 (20% of $10,000). But if the winning bid $40,000 (or less than that), only the face amount of the lien is paid at the sale. The premium is collected if the lien doesn’t redeem and the lien is foreclosed.

If you’re still a little confused about high bid premium, you can find a more thorough explanation in this article: https://taxlieninvestingtips.com/2011/03/30/questions-about-maryland-tax-sales.

Other peculiarities about Maryland tax sales

High bid premium is not the only unusual aspect of bidding at the Maryland online tax sales. Some of the Maryland online tax sales don’t really have online bidding. After registering online for the tax sale, bids are submitted on the day of the tax sale. Bids can be submitted either by mail, fax, e-mail, or digital upload – depending on the county.

It’s very important to register early for these tax sales, as some counties have deadlines for registration well ahead of the day of the sale. And since bidding procedures are vert different in each county, read the terms and rules for the sale carefully.

Another Unusual thing about Maryland tax sales is that the interest rate varies by county. There can be a big difference in the interest rate from one county to another. Just to give you an idea of what a big difference there is from one county to another; Frederick county has an annualized interest rate of 8% and Prince George’s County has an annualized interest rate of 20%. Most of the other counties have rates of either 12% or 18% per annum.

Maryland tax sale training

Tax Lien Lady’s® Maryland Online Tax Lien Sale training is a comprehensive video and audio training with links to resources and checklists. Find out more about our Done With You training for Maryland at  https://taxlienlady.com/Maryland.