Lowndes County’s delinquent property tax sale moved online for the first time this year.
County Tax Assessor Greg Andrews said the tax sale, which began Monday, has 63 registered buyers. Lowndes County has 1,900 parcels in the sale, with delinquent taxes worth $1.6 million.
A tax sale allows buyers to bid on delinquent property taxes. The bidding is a competitive process, which can generate overbids that go to the counties as revenue.
Supervisors unanimously approved a three-year contract with GovEase in February to begin hosting the county’s annual tax sale. Sixteen counties are holding online tax sales this year, with Lowndes being the only county in the Golden Triangle to make the transition. Andrews said he expects more counties will move online next year.
Since GovEase hosts the Lowndes sale, Andrews said the online sale is much easier on his office. He also noted it opens the sale to more out-of-town buyers, though that may be the acceleration of a trend that was already setting in. For instance, he estimated of last year’s 202 buyers, roughly 75 percent were from out of town.
“In my opinion, the tax sale has gone great for the last 26, 27 years that I’ve been here,” Andrews said. “What this is doing is eliminating a lot of the local buyers, and we hate that, but you have to keep up with technology and these companies are coming from all over the country bidding here.”
This year, Lowndes County’s tax sale is getting bidders from across the state, such as Columbus, Starkville, Jackson, Corinth, New Albany and others, as well as Nebraska, Alabama, Florida, California Missouri and Tennessee.
Oktibbeha County is also hosting its regular tax sale this week with in-person bidding at the county courthouse in Starkville. The tax sale, which also began Monday, is expected to conclude today or Wednesday. Tax Collector Allen Morgan was unavailable for comment.
How it works
Most, if not all, of the property taxes up for sale are typically purchased in tax sales. Those that aren’t purchased could be returned to the state or tied up in bankruptcy.
Andrews said it’s possible, but uncommon, for someone to assume ownership of a property after buying the taxes.
After the taxes are bought, an owner has up to two years to redeem the property by paying the delinquent taxes. If the owner does redeem the property, then the county returns the buyer’s money, plus 1.5 percent — 18 percent a year — monthly interest it accrues for up to two years.
However, if the two-year period passes without the property owner redeeming the property, the buyer can assume ownership by getting a tax deed from the chancery clerk’s office.
Fewer buyers
Andrews said 145 buyers started registered for the sale this year, but 82 did not properly complete registration by sending payment information to his office, despite receiving mail from his office and three emails from GovEase with registration instructions.
The 63 who completed registration are far fewer than the 202 buyers who took part in last year’s tax sale, and the sale is moving along at a slower pace than the when the county held bids in-person. Still, Andrews said he’s not concerned about having enough buyers to bid on all the properties in the sale. Part of the registration includes allowing buyers to set limits they don’t want to spend more than for the tax sale, and Andrews said some buyers have spending limits worth more than the entire sale.
“The total sale is $1.6 million,” Andrews said. “We’ve got some buyers with limits that are over $2 million. We’ve got one buyer that’s got a $5 million limit.”
As of Monday morning, about 80 parcels were selling per hour, with $70,000 in property taxes sold generating roughly $10,000 in overbids. Overbids on property go to the county, and Andrews said Lowndes received about $80,000 in overbids. With the online sale, he said he expects that number to triple, which could generate more than $200,000.
In the early going, Andrews said buyers were overbidding by an average of 13.5 percent, well more than the 4 to 7 percent he normally would expect.
Such growth would not be unprecedented — when Lowndes County contracted with GovEase, company CEO and Co-Founder Trey Pittman said Lee County’s overbid revenue grew from $292,000 in 2015’s tax sale to $442,000 when the county moved online in 2016.
Andrews said taxes are distributed to the appropriate entities — the city, county, schools and so on — after they’re collected from the sale.
Any extra money certainly can help. Any money we can get that doesn’t burden the taxpayer as far as extra taxes is welcome.
Lowndes County Board of Supervisors President Harry Sanders said he thought the money could be useful for the county, though he said he had some reservations about people from far outside the county or outside the state potentially owning property and not caring for it. Still, he said the county would have to weigh that risk against extra revenue.
“Any money that we can get that doesn’t hurt the taxpayers is certainly welcome,” Sanders said.
Alex Holloway was formerly a reporter with The Dispatch.
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