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Louisiana (LA) Redemption Tax Deed Sales

Louisiana

Sale Type: Redemption Tax Deeds
Interest Rate: 12 % + 5% Penalty
Bid Method: Bid Down Interest
Redemption Period: 3 Years
Sale Date(s): January - April
State Statute(s): Article VII, Sec. 25
Over-the-Counter: No
State Website: http://www.louisiana.gov/

Louisiana State Overview

Louisiana is classified as a Redemption Deed State. The municipal or parish tax collector oversees the sale which is an oral public auction. Tax deeds are sold with a 3 year right of redemption. Investors receive a rate of return of 1% per month, or 12% annually. Investors also receive a penalty rate of 5% upon redemption, making the annual rate a return of 17%. If the property owner does not pay all delinquent taxes, interest, penalties, and fees by the end of the 36 month period, the right to redeem the property will be forfeited.

Tax deeds are awarded to the investor who bids down to the lowest percentage of ownership in the property. Louisiana"s State statutes are based on a French law called the Napoleonic Code instead of the English common law used in almost every other state. Because of this difference, it can make the statutes difficult to understand and often confusing.

There is a 12% annual rate of return or a 1% per month return in Louisiana. The state also mandates a flat penalty rate of 5% due to the deed holder upon property redemption. The overall rate of return an investor receives is determined by the redemption date. A property redeemed after 1 month would yield an interest rate of 72% (1% + 5% penalty X 12 months), while a property that redeemed after 35 months would yield a return of 13.7%.

Louisiana uses a bid down ownership method. Investors compete by bidding down how much property ownership backs the redemption deed or tax lien. Using this system requires a lien holder to file a court action to prosecute the foreclosure in order to sell the property. The proceeds would then be divided based on the percentage of the ownership held.

  • Tax Sale Type: Hybrid Tax Deed (Sec. 47:2183).
  • Contact: (Sec. 47:2182).
  • Interest Rate and/or Penalty Rate: 12% per annum plus 5% penalty. (Sec 47:2224.).
  • Bid Procedure: Premium bid / highest bid.(Sec. 47:2183).
  • Redemption Period: Three (3) years. (Sec. 47:2183 (a)).
  • Law: Louisiana Constitution, Title 47, Subtitle III, Chapter 5, "Tax Sales and Redemptions."
  • Record the Tax Deed. According to (Sec. 47:2183 (A)) the purchaser must file the deed 'for record in the conveyance office in the parish in which the property is situated.' to begin the countdown of home owners three (3) year right to redeem.
  • Obtaining a writ of possession. Louisiana is unique in that the purchaser of the hybrid tax deed can request immediate possession of the property before the expiration of the home owners three (3) year right to redeem has expired.