Free Investor Tool
Tax Sale Redemption ROI Calculator
Estimate your return if an owner redeems after you acquire the lien or deed. Pick a state, enter your investment, and see the payout, net profit, and annualized ROI using that state's statutory interest or penalty rate.
Your Scenario
25% penalty if redeemed within the first year; 50% in the second year (homestead/ag).
Leave blank to use the statutory rate. Override it to model a bid-down auction rate (e.g. Florida / New Jersey).
Estimated Outcome
Based on Texas's 25% penalty (1st year). A penalty is a flat, one-time return regardless of the exact redemption month within the window.
Estimates based on 2026 published statutory interest and penalty rates. Rates, redemption windows, and bid-down rules vary by county and change over time. Consult a licensed attorney in your jurisdiction before any investment decision. This is not legal or financial advice.
How redemption returns work
Penalty states
States like Texas (25–50%) and Georgia (20%) charge a flat penalty the moment the owner redeems. The penalty does not pro-rate, so an early redemption produces a very high annualized ROI. These states reward fast turns.
Interest states
States like Iowa (24%), Ohio (18%), and Alabama (12%) pay annual interest that accrues over the months you hold the lien. The longer the owner takes to redeem, the more interest you earn — these reward patient capital.
Bid-down auctions
Florida and New Jersey set an 18% statutory ceiling, then bid the rate down at auction. Model the ceiling first to see the upside, then override the rate field with the rate you actually won for a realistic estimate.
More Investor Tools
How long owners have to redeem, all 50 states + DC.
Suggested offer, curative costs, and 5 exit strategies side-by-side.
Compare maximum interest and penalty structures by state.
Upcoming tax sale dates across every state.
Frequently Asked Questions
How does a tax lien or tax deed redemption pay me back?
When the original owner redeems, they must repay what you invested plus a statutory return. In tax lien states that return is usually annual interest (for example 12% in Alabama or 18% in Ohio). In penalty states like Texas and Georgia it is a flat one-time penalty (25–50% in Texas, 20% in Georgia) regardless of when within the window they redeem. This calculator applies each state's structure to your numbers.
What is the difference between a penalty and interest return?
A penalty is a flat percentage owed the moment the owner redeems — it does not pro-rate, so a 25% Texas penalty is the same whether they redeem in month 1 or month 11. Interest accrues over time, so a 12% annual rate held for 6 months returns roughly 6%. Penalty states tend to produce very high annualized ROI on early redemptions; interest states reward longer holds.
Why is my annualized ROI so high on a short redemption?
Annualized ROI scales your total return to a 12-month basis. A flat 25% penalty earned in 3 months annualizes to about 100% because you earned the full penalty in a quarter of a year. That figure is a comparison tool, not a promise — owners redeem on their own timeline, and many never redeem at all, in which case you may acquire the property instead.
Are the bid-down states (Florida, New Jersey) accurate here?
Florida and New Jersey set a statutory maximum (18%) that is bid down at auction — winning bidders often accept a lower rate. We model the statutory maximum by default so you can see the ceiling, but you can override the interest rate field with the rate you actually won to get a realistic estimate.
Is this tool free, and is my data stored?
Yes, it is completely free with no signup and no usage cap. The calculator runs entirely in your browser — we only log anonymous, aggregate usage (state, amount, months, and the resulting ROI) so we can improve the tool. No property records or personal identifiers are involved.
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