Why 32,000 Tampa Bay Property Tax Bills Went Unpaid in 2018
In Tampa Bay, Florida, the local government is having a property tax problem. Specifically, local residents and business owners simply have not paid them. While every municipal government struggles with this issue to one degree or another, Tampa Bay had a particularly rough 2018. In fact, thanks to a Chinese investment company that snapped dozens of both commercial and residential properties in 2008 while Florida was still floundering in the housing crash, one single owner opting out of paying his property taxes has singlehandedly accounted for about $100,000 of property taxes that remain unpaid.
Overall, about 32,000 property owners in Pinellas and Hillsborough Counties failed to pay 2018 property taxes by the deadline, putting residential housing, nursing homes, office buildings, hotels, and even a private school on the delinquent list. Local developers also failed to pay up, and so did a number of historic properties on which are located hotels and bed-and-breakfast venues. Up for bid in pending tax certificate auctions are also a $7.9 million mansion, an assisted-living facility, and a specialty medical practice specializing in “minimally invasive surgery.”
Chinese investor delinquency
The biggest overall cumulative delinquency belongs to the Chinese investor, however. The investor used a company called Rich St Pete LLC to purchase properties after the housing crash, but in 2018 paid on only seven of them. He could not be reached for comment, and the counties issued tax certificates in response to the delinquency. In Florida, property owners have two years to pay the delinquent taxes, interest on the debt, and other associated costs. When the two-year mark hits, the owner of the certificate (usually another investor) can bring the taxes current. If they opt not to, then the property moves into a tax deed auction.
While Florida is not generally considered to be one of the friendliest venues when it comes to tax lien and tax deed investing, what is happening in Tampa Bay is a harbinger of things to come in other areas of the country. Investors should watch their preferred markets carefully for signs that investments made cheaply and in haste in the wake of the housing crash and subsequent financial meltdown could be entering the property tax debt system. When they do, savvy investors with the right type of access to the information about these properties and the ability to engage in tax lien and tax deed auctions effectively, meaning that you will not be “bid up” by locals in an effort to keep you out of the action in the future, will be perfectly positioned to acquire incredibly valuable properties at relatively low costs.
