Philadelphia’s experiment with online tax auction proves big winner
PHILADELPHIA
The City of Brotherly Love just completed a test drive of an online property tax lien auction and officials there are extremely pleased with the results.
Revenue Commissioner Clarena Tolson said the process was “the fastest and most impactful tool that anyone in Revenue can recall.” The city had a net of $2.1 million. Investors bought about 25 percent of the 865 liens offered. More than twice that many property owners stepped up to clear their taxes.
“Obviously this is a major win for Philly,” said Ted Thomas, a global expert in tax lien sales. “The city needs that revenue to provide services to the citizens. The revenue department has now found out why online sales are so successful. They bring in investors from everywhere.”
Because this is a lien sale, the people who bought the tax liens from the City likely will not wind up owning property in Philly. Mr. Thomas said more than 90 percent, some as high as 98 percent, of tax liens sold at auction are redeemed. The property owners redeeming those taxes must buy back the liens plus interest.
“Investors win and the city wins,” Mr. Thomas said. “The city gets its taxes and the investors are going to see a good return on their money. This is exactly why investing in tax lien sales is such a good idea.”
Mr. Thomas also complimented Philly on trying the online auction process.
“Tax lien sales are supposed to be a public auction. But a lot of people cannot afford to invest and attend the auction in person. By putting this sale online, Philadelphia opens the sale to the world. They saw how well this went, how much money was brought in and how fast it went,” he said. “More and more tax departments are taking their sales online. I support this fully.”
For more information about tax liens, visit www.TedThomas.com.
ABOUT TED THOMAS – A noted expert in the field of distressed real estate investing, Ted Thomas operates the website www.TedThomas.com where he offers advice on this investment strategy. He lives in Merritt Island, FL.
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