Amid the economic downturn, Charleston County is selling 1,299 properties and 507 mobile homes due to unpaid property taxes, numbers that would set a record if all the properties are sold.
At the height of the local real estate upswing, in 2006, fewer than 500 properties were sold at tax sale in Charleston County.
While this year's sale could set an unfortunate record, Delinquent Tax Collector Mary Scarborough said the number of properties for sale might have been even higher if the county had not waited a month later than usual to hold the sale, giving people an extra month to pay their tax debt.
The properties being sold this week are those with unpaid 2009 property tax bills. The owners of the properties still have a year to reclaim them, if they are sold at tax sale, but they would have to pay substantial interest charges and fees.
It's primarily the interest charges that attract local residents and out-of-town investors to the tax sale every year. Most of the properties sold at the tax sale won't end up changing hands -- between 85 and 90 percent are reclaimed by the owners --but the bidders will get up to 12 percent interest on their money.
Here's an example of how it works:
Mr. X has not paid a $500 bill for 2009 taxes owed on a property.
--The property goes to tax sale in the fall of 2010.
--Bidding starts with the Forfeited Land Commission offering about $1,300, representing 2009 and 2010 taxes, plus a late payment fee and the county's costs to process the sale.
--The winning bidder will earn 3 percent interest each quarter (every three months) for a year until the property is reclaimed. If the property is not reclaimed, or "redeemed," then the bidder gets the property.
--Interest payments are capped at an amount equaling the opening bid, in this case $1,300. That means Mr. X could end up with interest charges and penalties worth about three times his original tax bill.
--If the property were sold at auction for $10,000, and later redeemed by Mr. X, the bidder would receive between $300 and $1,200 in interest depending on which quarter of the year the redemption took place.
In some cases, properties are up for tax sale because they are separately going through the foreclosure process. The owner hasn't paid the taxes because a lender is foreclosing, and the lender hasn't paid the taxes because the foreclosure hasn't been completed. If the foreclosure goes through, the lender then redeems the property and pays the interest charges.
Charleston County's tax sale started Monday. The last of the properties are expected to be sold today, followed by the mobile home sale.
The properties are sold auction-style in the County Council chambers. Each property goes to the highest bidder, with cash, a money order or a certified check due that day.
Reach David Slade at 937-5552.