Tax Lien Sale

• Most counties in Iowa hold tax lien auctions annually as a way to collect past due property taxes. Investors must register for the tax sale in advance, and fill out an Internal Revenue Service form W-9 for tax reporting purposes. Investors who are not private individuals must also submit a tax identification number and additional paperwork as part of the registration process.
  
  

Ownership Bidding

• Iowa's tax lien bidding system works differently than most. If more than one person is interested in buying the tax lien for a property, all interested parties must bid down the percentage of ownership they are willing to accept. An investor may bid for 75 percent ownership of the property, and that would leave them sharing potential future ownership with another party. This can complicate matters in the future if an investor needs to foreclose on a tax lien property, because he would need to buy out one or more other investors. Because of these complications, most counties elect to award tax lien certificates by random selection instead of using the partial ownership bidding system.
  
  

Redemption Period

• Iowa also differs in the way they handle redemption periods. The redemption period is a set amount of time in which the property owner can fully pay back the lien and all penalties or interest, and have the lien released. The official redemption period is one year and nine months in Iowa, but because of the 90-day notice rule, the effective redemption period is two years.
  
  

90-Day Notice

• In Iowa, the tax lien holder must file a "90-Day Notice of Right of Redemption Affidavit" one year and nine months after they purchased the tax lien certificate if they intend to foreclose on the property. The lien holder cannot take foreclosure steps without filing this paperwork, and if they fail to do so within three years from the time of purchase the county treasurer may cancel the tax lien certificate.