Tax Sale Excess Funds, Explained

How excess funds can arise

When property taxes go unpaid, a county may eventually sell the property at a tax sale to collect the amount owed. Tax sale bidding is often competitive, and the winning bid can exceed the total taxes, interest, penalties, and costs associated with the sale.

When that happens, the difference between the sale price and the amount owed is generally referred to as excess funds, sometimes also called overage or surplus funds, depending on the jurisdiction.

Who may have an interest in the funds

Depending on the circumstances and applicable law, parties who may have an interest in tax sale excess funds can include the former owner of record, heirs of a former owner who has passed away, and, in some cases, lienholders with a recorded interest in the property.

General process considerations

The process for claiming excess funds is typically administered by the county or a court, often involves submitting documentation establishing an interest in the property, and can include specific deadlines and procedural requirements that vary by jurisdiction.