Tax Deed Redemption Period ROI Calculator
Tax deed states give original owner a redemption period (6 months to 3 years) to repay tax + penalty + interest. If redeemed, you collect statutory return (often 15-50% APR). If not, you take title.
| Tax deed paid | — |
| Redemption period (months) | — |
| Statutory penalty/interest earned | — |
| Cash return if redeemed | — |
| Annualized return if redeemed | — |
| Net value if title taken (value − costs) | — |
| ROI multiple if title taken | — |
Tax deed investing: buy delinquent property tax bills at county auction. If original owner redeems during redemption period (6 months to 4 years depending on state), you collect statutory penalty/interest (10-50% APR depending on state). If they fail to redeem, you take title to the property — often at pennies on the dollar of market value. State laws vary dramatically — Texas pays 25-50% penalty, Tennessee 10%, Florida varies.
How Tax Deeds Work by State
Tax Deed States: TX, GA, MS, TN, RI, CT, DE, NH, MA — buyer gets deed at auction; original owner has redemption period to repay tax + penalty + interest. Hybrid States: FL, AZ, IL, MD, NJ — buyer gets certificate that converts to deed if not redeemed. Tax Lien States: most other states — buyer gets only a lien, not deed (different math, separate tool). State laws differ on rate, period, and what happens to other liens.
Risks Most Investors Miss
(1) Property condition unknown: you bought sight unseen; many tax deed properties are uninhabitable. Demolition can cost $10K-$30K. (2) Surviving liens: federal tax liens, IRS judgments, certain municipal liens may survive tax deed in some states. Title insurance often unavailable for 1-2 years post-purchase. (3) Quiet title action: required before resale, $3K-$8K legal cost, 6-12 month timeline. (4) Bankruptcy filing by original owner can extend redemption indefinitely.
Last updated May 2026. Sources: National Tax Lien Association.