Tax Auctions Vary Globally: Research Before Investing Internationally

The concept of the “county system” is most famously associated with the United States, but the idea of administrative subdivisions with responsibilities similar to counties exists in many nations. However, the specifics of tax auctions—particularly related to real property and their governance—vary widely from country to country.

  1. United States:
  • County System: The U.S. has over 3,000 counties or county-equivalent entities, spread across its 50 states. They act as local administrative divisions and have a wide range of responsibilities, including public safety, road maintenance, and more.
  • Tax Auctions: When homeowners fail to pay property taxes, counties in many U.S. states hold tax lien sales or tax deed sales to recover the owed amount. Investors can buy the tax lien or the property itself, depending on the state’s specific rules.
  1. Canada:
  • County System: Canada’s administrative divisions include provinces and territories, which are further divided into counties, regional municipalities, and similar entities.
  • Tax Auctions: Tax sales are common in Canada when property taxes are delinquent. The specifics can vary from one province or territory to another, but generally, municipalities will auction off properties to recover the owed tax amount.
  1. Australia:
  • County System: While Australia does have counties, they aren’t administrative divisions in the same way as in the U.S. Instead, Australia’s primary subdivisions are states and territories, which are further divided into local government areas (LGAs).
  • Tax Auctions: Property tax regulations differ by state, but in general, if rates (local property taxes) aren’t paid, councils can sell the property to recover the debt.
  1. Ireland:
  • County System: Ireland is traditionally divided into counties. While they’ve evolved over time, they remain significant for local governance.
  • Tax Auctions: While Ireland doesn’t have tax auctions in the same manner as the U.S., properties can be repossessed and auctioned if homeowners default on their mortgages or other debts.

Other countries may have administrative divisions or subdivisions that function similarly to counties, but the specifics of tax auctions and the handling of delinquent property taxes vary widely based on local laws, traditions, and financial systems. Before considering investments in tax auctions outside one’s familiar jurisdiction, thorough research and consultation with local experts are crucial to understand the nuances and potential risks.