- Property taxes are used to pay for county and city government services such as public education, the police and fire departments or road maintenance. When property taxes are not paid, the county does not have the operating funds it needs to continue services. If the property tax on any property --- residential, commercial or undeveloped land --- goes unpaid for more than one year, the county may auction off a tax lien on the property as a way to collect the funds it is owed.
- Ohio holds public tax lien auctions, but, unlike most states, it does not auction off each tax lien individually. In Ohio, tax liens are auctioned off as one full unit that can consist of hundreds or thousands of tax liens together. It's not uncommon for the winning bidder at these tax auctions to pay several million dollars for the block of liens, and because of this Ohio counties generally require bidders to pre-register for the auction and provide proof of financial eligibility.
- A redemption period is much like a grace period. During the redemption period, a property owner retains all rights in and control of his property. During the redemption period the property owner can pay off the tax lien along with any additional fines, fees and penalty payments and the annual interest rate that was awarded the tax lien investor at the tax auction. In Ohio, the redemption period is 1 year from the date of the tax auction.
- When the 1 year redemption period expires, if the property owner did not repay the tax lien with all interest and additional fees, the tax lien certificate holder may legally foreclose on the property and take full ownership of the deed. Most counties require the tax lien holder to pay additional fees and file foreclosure paperwork before the deed can be issued.
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