Question

What does a tax certificate do?

a. Certifies to tax collectors that a property owner has paid all ad valorem taxes on the property for the calendar year.
b. Entitles its holder to apply for a tax deed after a certain period.
c. Exempts its holder from paying taxes on the particular property referenced by the certificate.
d. Waives a property owner's rights of redemption in a foreclosure.

Answer 1

A tax certificate entitles its holder to apply for a tax deed after a certain period, representing a lien on the property for unpaid property taxes.

Step-by-step explanation:

A tax certificate is a document that plays a significant role in the collection of property taxes. Specifically, a tax certificate does not certify that a property owner has paid taxes, nor does it exempt the holder from paying taxes or waive the property owner's redemption rights in a foreclosure. The correct answer to the question is that it entitles its holder to apply for a tax deed after a certain period. When property owners fail to pay their property taxes, the government may issue a tax certificate to investors at an auction. The certificate represents a lien on the property, essentially the unpaid taxes, which the investor pays to the municipality. The holder of the tax certificate can eventually apply for a tax deed to the property if the original owner does not redeem the certificate by paying the back taxes plus interest.