Disbursement of Excess Funds from Tax Sale

Article discusses disbursement of tax sale proceeds when the tax sale generates more cash than is needed to satisfy the tax lien.

Disbursement of Excess Funds in Tax Sale

When property ad valorem taxes go unpaid, the county tax commissioner has a few options. The tax commissioner can sell the tax lien or have the sheriff levy the property in return for a tax deed. Often at a tax sale, the highest bid will far exceed the amount of the outstanding taxes because the recipient is entitled to collect the amount paid at the tax sale plus a 20% penalty if the tax deed is redeemed.

If the tax sale amount is greater than the taxes, what happens to that excess? In Georgia, the excess will first be applied to the sheriff’s levy fees, the remainder will go to satisfy any other taxes that are outstanding. Any excess then belongs to the property owner, however it can also be properly claimed by a lienholder.

The specific requirements for claiming the excess vary from county to county, but generally include the following:
  • Affidavit by the homeowner identifying the property and tax parcel number which states the basis for the claim for excess funds.
  • A title examination of the property may be required to support the statements made in the affidavit.
  • If the property has been redeemed, the deed releasing the property back to the homeowner may be requested.
  • The county may also ask for an indemnification agreement that essentially allows the government authorities to rely on the representations made.

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OCGA § 48-4-42. Amount payable for redemption

The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments on the property, plus a premium of 20 percent of the amount for the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year thereafter. If redemption is not made until more than 30 days after the notice provided for in Code Section 48-4-45 has been given, there shall be added to the redemption price the sheriff's cost in connection with serving the notice and the cost of publication of the notice, if any. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser's successors.

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