Behind on Property Taxes in Iowa?

Back Taxes in Iowa: Your Options

This page explains what happens in Iowa when property taxes on a lot or acreage go unpaid. It covers the September and March installments, the interest on late taxes, the annual tax sale in June, how long you have to redeem, what redemption costs, and how to check what you owe. It is written for owners of vacant land, including heirs who inherited a parcel with back taxes.

Back taxes do not stop you from selling. At an Iowa tax sale the buyer gets a certificate of purchase, not your land. You keep the right to redeem until the buyer serves a notice and the 90 days in that notice run out. Until a treasurer's deed is issued, you can redeem, or sell the land and have the taxes paid from the sale at closing. This page is general information, not legal or tax advice; for your own parcel, ask your county treasurer or an Iowa attorney.

When Iowa property taxes are due and when they become delinquent

Iowa taxes are paid one year behind. You can pay the full year, or pay half before September 1 and the other half before March 1 (Iowa Code 445.36).

The first half becomes delinquent on October 1 and the second half on April 1. If the last day of the month before falls on a weekend, the date moves to the second business day of the month (Iowa Code 445.37). A mailed payment counts as on time if the postmark is before the delinquent date.

If an installment is still unpaid on November 1, the county treasurer mails a notice of the delinquency. Not receiving a notice does not cancel the amount owed.

Interest on late Iowa property taxes

Delinquent taxes draw interest of 1.5 percent per month from the delinquent date until paid. Each part of a month counts as a full month, and the minimum interest charge is $1 (Iowa Code 445.39). That is 18 percent a year, so a small bill grows fast.

What the county does next: the annual tax sale

Each year on the third Monday in June, the county treasurer offers at public sale every parcel with delinquent taxes. The sale is for the total of taxes, interest, fees and costs (Iowa Code 446.7).

By May 1, the treasurer mails a notice of the sale to the person the parcel is taxed to. The notice lists the amount owed and warns that a deed may be issued if the parcel is not redeemed. The treasurer also publishes the sale list once in a county newspaper one to three weeks before the sale (Iowa Code 446.9).

Iowa bidders compete on percentage, not price. The winning bidder is the one who will pay the full amount due for the smallest percentage of the parcel, as low as 1 percent. That bidder gets a certificate of purchase. The percentage becomes an undivided share of the parcel only if a treasurer's deed is later issued (Iowa Code 446.16).

Redemption: paying off the certificate

You redeem by paying the county treasurer, who holds the money for the certificate holder. The amount is the sale price including the certificate fee, plus interest of 2 percent per month from the month of sale, plus any later years' taxes the holder paid, with the same interest. Each part of a month counts as a full month. To avoid another month of interest, the payment must reach the treasurer by the last day of the month (Iowa Code 447.1).

The right to redeem does not end on a fixed date. After 1 year and 9 months from a regular sale, the certificate holder may serve a notice of expiration of the right of redemption. The notice goes by regular and certified mail to the person in possession, the person the parcel is taxed to, mortgage holders and others with a recorded interest. You then have 90 days from completed service to redeem (Iowa Code 447.9). For some parcels sold under special sale rules, the holder may serve the notice sooner, after 9 months or 3 months.

If the land is not redeemed

If no one redeems within the 90 days after the notice, the certificate holder can obtain a treasurer's deed for the share of the parcel bid at the sale. Once that deed is issued, the right to redeem is gone. Ask the treasurer or an Iowa attorney as soon as you receive a notice of expiration.

Your options if you owe back taxes on Iowa land

Paying before the June sale costs less than redeeming afterward, because redemption interest is 2 percent per month instead of 1.5 percent.

• Pay the delinquent taxes and interest to the county treasurer before the third Monday in June.
• Redeem after the sale by paying the treasurer, before the 90 days in a notice of expiration run out.
• Sell the land. The taxes or the redemption amount are paid from the sale price at closing.

Selling Iowa land that has back taxes

You can sell land with delinquent taxes, and you can sell after a tax sale while you can still redeem. At closing, the title company or closing attorney pays the county treasurer the taxes, interest and any redemption amount from the sale price. The buyer receives clear title, and you receive the rest.

EasyLotBuyer buys vacant land with back taxes, liens and title issues. We make a cash offer within 24 hours, charge no fees or commissions, pay the closing costs, and can close in as few as 7 days. The back taxes are paid at closing from the sale.

Where to check your Iowa tax status

Your county treasurer collects property taxes and runs the tax sale. Many Iowa county treasurers offer tax lookup and payment through the shared Iowa Treasurers site. Search by parcel number, address or name, or call your county treasurer for a redemption figure. The statutes are on the Iowa Legislature site.