In Indiana, parties generally have one year following a tax sale to redeem the property before the tax sale purchaser will take title to the property. Nevertheless, to redeem requires the redeemer to pay a premium of 10% plus interest to the tax sale purchaser, so property owners and creditors have a significant incentive to prevent the property from being sold at tax sale.
Although each county sets the date for its own tax sale, all Indiana tax sales occur each fall. Pursuant to Indiana Code §6-1.1-24-5, properties may be set for tax sale if both installments from the previous year have not been paid (in the case of vacated properties, only one installment from the previous year must be unpaid). For example, properties are eligible for the Fall 2014 tax sale if the property owner failed to pay the taxes due in the Spring and Fall of 2013.
The County certifies the list of properties to be sold at tax sale anytime between January 1 and July 5. Most counties certify their list of properties on or around July 1. Pursuant to Indiana Code §6-1.1-24-2(a), once a property has been certified for tax sale, all delinquent property taxes owed through the date of certification must be paid in order to have the property removed from the tax sale.
Therefore, if a party wants to keep a property from being certified for tax sale, that party must ensure that it has paid the Spring tax installment from the previous year before the County certifies the list of properties (or if the property is vacant, the Spring and Fall installments from the previous year). Once a property has been certified, however, the amount that must be paid to have the property removed from the tax sale increases to include not only the Spring taxes from the previous year, but also the Fall taxes from the previous year and, assuming that the certification did not occur until after Spring taxes were due for the current year, those taxes as well. As an example, for 2014 tax sales, the property will not be certified if the Spring 2013 taxes were paid prior to the date of certification. However, to have the property removed from the tax sale list between the date of certification and the tax sale date, Spring 2013, Fall 2013, and Spring 2014 (assuming certification occurs after May 15, 2014) all must be paid. While these are all amounts owed that would need to be paid at some point, waiting until after the certification date will significantly increase the amount that must be paid now to avoid the tax sale.
