State Summary

The commonwealth of Kentucky is a lien state, and tax sales are the responsibility of the county sheriff’s office. The interest rate is 12% per annum and the redemption period is 1 year. The lien holder may pay subsequent taxes that will also receive interest of 12% per annum. It is difficult to find any information online about tax sales in Kentucky. Sometimes county and city governments are merged together, in which case the city or the county could be the collector of taxes. Tax collection and the conducting of tax sales could be the responsibility of the county sheriff, the city tax collector, or, in the case of Jefferson County, the county attorney. Procedures for Kentucky tax sales are unusual and unlike that in any other state. Tax sales are referred to as “tax bill sales,” because they are actually selling the tax bill.



Fayette County government is combined with that of Lexington City. They hold their tax sale once a year in July and publish their sale list both online and in the local newspaper. Bidding is by sealed bid on a first come, first served basis. If your bid is the first to arrive, you win the lien. Bids are for the amount due plus a 10% penalty, 10% sheriff’s fee and $14.00 for advertising. The interest rate is not bid down, the price of the lien is not bid up and the percent interest in the property is not bid down. There is really no competitive bidding! The competition is about being first to get your bid in. The bid must be submitted in writing and can be mailed, faxed, e-mailed, or brought in person to the Lexington-Fayette Urban County Government Division of Revenue.



Although your bid can be submitted by mail, you or your representative must be present on the day of the sale to have your offer accepted and be issued a “certificate of delinquency” (the equivalent of a tax lien certificate).

The certificate of delinquency is filed with the county clerk within 14 days of the sale and then delivered to the purchaser. The holder of the certificate must notify the delinquent tax payer within 50 days of the lien held against his/her property; that it bears interest of 12% per annum and that, if the certificate is not paid, it will be subject to collection as provided by law. Certificates are assignable.



This system sounds great for investors, doesn’t it? But there is one catch. If the division of revenue receives bids totaling over $200,000.00 for the entire sale, then the sale is halted and the county buys all of the liens. Any liens not receiving bids can still be purchased by investors from the county clerk’s office, only now there is an added cost: a 20% county attorney’s fee and a 10% county clerk’s fee. If you purchase a certificate of delinquency from the county clerk, the certificate is assigned to you and you are responsible for collecting the amount due plus interest from the delinquent tax collector.



If the lien is not redeemed within the 1-year redemption period, the lien holder may foreclose on the property. You are required to foreclose within 10 years of the expiration of the redemption period, or lose your investment. Foreclosure does not guarantee that you will get the property. The judge may rule that the property go to foreclosure sale, in which case the property will go to the highest bidder at the sale, and you will get paid on your lien.

Summary courtesy of Joanne Musa's State Guide