Kentucky State Overview
Kentucky is classified as a tax lien state. Tax sales re usually conducted in April of each year. The local county tax collector or local Sheriff will conduct a public sale of all parcels that are delinquent on their property taxes. The tax sales are conducted as an oral public auction and uses a premium bidding method. Tax Liens in Kentucky are purchased with a one year right of redemption. The rate of return is 12% annually, or 1% per month. The state also enforces a penalty of 10% of the total lien amount as compensation to the local tax collector. This amount is paid by the investor as part of the lien’s minimum bid, and is ultimately paid upon redemption by the property owner.
Kentucky uses a premium bid method. The counties starting bid will include the back taxes, penalties, interest and any administrative cost. The lien will be bid up in price until the bidding stops. The investor bidding the highest amount will receive the tax lien certificates to the property.
Tax liens in Kentucky are purchased with a one year right of redemption. If the property owner does not pay all delinquent taxes, interest, penalties,a nd fees within one year, the investor may begin the process of terminating the right of redemption. Within 50 days of purchasing a tax lien certificate the lien holder is responsible for sending a notice to the property owner. The notice must advise the owner of the penalty rate of 12%, as well as the impending consequences and legal actions if payment is not made.Tax deeds are obtainable through judicial foreclosure following the 1 year redemption period.
In Kentucky, the tax collector or treasurer will sell tax lien certificates to the winning bidders at the delinquent property tax sale.
- Tax Sale Type: Tax Lien Certificate (Sec. 134.450).
- Contact: The Sheriff or Tax Collector (Sec. 134.450).
- Interest Rate and/or Penalty Rate: 12% per annum. (Sec. Sec. 134.490).
- Bid Procedure: Premium / Highest Bid. (Sec. 134.450).
- Redemption Period: One (1) year. (Sec. 134.470 and Sec. 134.480).
- Law: Kentucky Revised Statutes, Title XI, Chapter 134, “Payment, Collection, and Refund of Taxes.”
- Notification According to (Sec. 134.490) the purchaser must, within 50 days after the purchase of a certificate of delinquency (tax lien certificate) give ‘notice’ according to the stipulations outlined in Sec. 134.490 to the owner of the tax delinquent property.