Five States to Know for Tax Lien Investing in 2026

Actualizado Oct 8, 2026 · Este artículo está disponible en inglés.

Not every state sells tax liens, and the ones that do run very different systems. Below are five lien states that investors study most often, with the features that matter and where each one gets complicated.

What makes a state attractive

The rate the law allows, and whether bidding pushes it down.
How long your money may be tied up before the owner redeems or you can act.
Access: online sales and over-the-counter (OTC) purchases mean you do not have to travel.
What happens without redemption: a county application process is usually cheaper than a lawsuit, but a court judgment can give a stronger title.
Local market health: growing areas tend to see more redemptions and more valuable collateral.

1. Florida (up to 18%)

Why investors like it: a maximum rate of 18% per year, bid down at the annual sale; a mandatory minimum charge of 5% of the face amount on redemption (unless the certificate was bid at 0%); and many counties sell unsold, county-held certificates afterward.
After non-payment: two years after the certificate is issued (counted from April 1 of the sale year), the holder may file a tax deed application with the tax collector. The property then goes to a public tax deed auction run by the clerk. Certificates expire after seven years.
Watch out for: heavy competition at sales can push rates very low.
Read more: Florida tax lien guide.

2. Arizona (up to 16%)

Why investors like it: a maximum rate of 16% per year, bid down at the annual sale, and unsold liens that can often be bought from the county afterward.
After non-payment: the holder may start a court foreclosure action three years after the sale. Certificates expire if not foreclosed within the statutory deadline (ten years).
Watch out for: foreclosure is a lawsuit, with attorney costs.
Read more: Arizona tax lien guide, or browse Maricopa County.

3. Maryland (rate set locally)

Why investors like it: an established system with online sales in many counties. The redemption interest rate is set by each county or Baltimore City (for example, 18% in Baltimore City; other jurisdictions set different rates, some higher).
How bidding works: many counties use a high-bid premium rather than bidding the rate down, and the premium usually earns no interest.
After non-payment: the holder forecloses the right of redemption in circuit court, within statutory deadlines.
Read more: Maryland tax lien guide.

4. Iowa (2% per month)

Why investors like it: the statutory rate is 2% per month (24% per year) and is not bid down.
How bidding works: when several buyers want the same parcel, counties use tie-breaking methods such as bidding on the smallest percentage of undivided interest. Check each county's sale rules.
After non-payment: after the statutory waiting period, the holder serves a notice of expiration of the right of redemption; if it is not redeemed, the county treasurer issues a tax sale deed.
Read more: Iowa tax lien guide.

5. Illinois (bid on the penalty rate)

Why investors like it: a large market (Cook County alone is huge) and a clear court-supervised path to a tax deed.
How bidding works: buyers bid the penalty rate the owner must pay on redemption; the lowest bid wins. Statutory caps and details differ by county.
After non-payment: the holder petitions the circuit court for a tax deed. This is a legal process with attorney and notice costs, but it ends in a court order.
Read more: Illinois tax lien guide, or browse Cook County.

Before you choose

No state is "best" for everyone. Match the state to your goal (interest income or property), your budget, and how much legal work you are prepared to take on. Then pick specific counties and read their sale rules, because counties within one state can differ a lot.

Explore county pages on LienDeed, or start with the basics at LienDeed Academy.

This article is general information, not financial or legal advice. Tax-sale rules change; always confirm with the county.