Tax Certificate Process

Practice Auction Tax Certificate Process

Please note: While the following information is accurate, it is not meant to be a legal guide or comprehensive explanation of Chapter 77 of the Nebraska Revised Statutes which is the law governing tax certificates and their auction or sale.

What are tax certificates?

In Nebraska, taxes become due December 31. One-half of the taxes due become delinquent on May 1 and the second half on September 1 except in counties having a population of more than one hundred thousand. For those counties, the first half becomes delinquent April 1 and the second half August 1. The treasurer in every Nebraska county prepares a list of the properties with delinquent taxes four to six weeks before the first Monday in March of the following year. The list is published in a newspaper for three consecutive weeks beginning the first week in February.

The tax certificate’s face amount consists of the sum of the following: delinquent real estate tax (unpaid amount), interest, and the newspaper’s advertising charge ($5) plus other costs of the sale.

The Auction

The certificates are advertised once a week for three consecutive weeks before the auction. On the first Monday in March, the Treasurer must start the tax certificate auction (Note: tax certificates and the auction of them is governed by Chapter 77 of the Nebraska Revised Statutes. All requirements mentioned in this document come from Chapter 77 without the legalese).

To make a simplified analogy, think of the purchase of a tax certificate as a loan to the property owner. In return, the investor receives interest on the money loaned.

In Nebraska, the tax certificate conveys no property rights. It is simply a lien carrying an interest rate.

The interest on a certificate is 14% per statute. Simple interest accrues at an interest rate of 14% annually or .039% every day. If the certificate is not sold, the county will begin the process to foreclose on the property.

Now you own a tax certificate, so what can happen next?

If taxes subsequently become delinquent again, the certificate holder may pay those and add the amount of the payment to the current certificate. Those funds earn interest from that moment on.

When the owner pays the delinquent taxes, the interest is calculated and a check is sent out with a notice to the certificate holder.

The certificate can be sold and transferred (for $20) to another name.

Let’s say the owner doesn’t pay the delinquent taxes. At any time within nine (9) months after the expiration of three (3) years after the date of sale of any real estate for taxes or special assessments, if such real estate has not been redeemed, the purchaser or his or her assignee may apply to the county treasurer for a tax deed for the real estate described in such purchaser's or assignee's tax sale certificate. Failure to do so within the allotted time will result in the tax certificate becoming worthless.
BUYER BEWARE. Know what you are purchasing.

County Held Certificates

Certificates that don’t sell at auction are offered for purchase from the Treasurer’s office after the auction ends.

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