Tax sales in the District of Columbia work by auctioning off the tax liens on properties whose owners have fallen behind on real property taxes. The Office of Tax and Revenue holds the sale each July, third-party bidders compete for individual liens, and the delinquent owner then has six months to redeem the property by paying what’s owed plus interest. If no one redeems, the purchaser can sue to foreclose the owner’s right of redemption and eventually receive a deed. The District gets its tax money up front; the owner risks losing the property entirely.
Which Properties Go to Sale
DC law directs the Mayor to sell all real property on which taxes are in arrears, subject to a handful of exceptions.1D.C. Law Library. District of Columbia Code 47-1332 – Sale of Properties by Mayor; Exemptions From Sale The most consequential exception is a dollar threshold. For improved Class 1A or 1B properties, which covers most homes and condominiums, the delinquent tax must reach at least $2,500 before the property can be sold. For vacant land the floor drops to $200.2Office of Tax and Revenue. 2025 Real Property Tax Sale Legal FAQ
A property is also pulled from the sale if the Mayor has granted forbearance. Owners of homesteaded properties who owe $7,500 or less are entitled to forbearance on request, and the Mayor has discretion to grant it in hardship cases outside that automatic category.1D.C. Law Library. District of Columbia Code 47-1332 – Sale of Properties by Mayor; Exemptions From Sale Properties already encumbered by a valid, non-void certificate from a prior tax sale are likewise skipped, though that protection runs out after three years.
Notice to the Owner Before the Sale
Two mailings go out before an auction. On or before May 1, the Mayor mails a notice of tax delinquency by first-class mail to the last known owner address on the tax roll. If the property address is different from the owner’s mailing address, a duplicate goes to the property itself, addressed to “Property Owner.” A second, final notice follows at least two weeks before the sale date, again by first-class mail to both addresses.
One detail owners should understand: the statute makes clear that a failure to send these notices does not invalidate the sale. An outdated address on file is the owner’s problem, not a defense.
When and How the Auction Runs
The annual sale typically takes place in mid-July. The 2025 sale ran on July 16 and 17.2Office of Tax and Revenue. 2025 Real Property Tax Sale Legal FAQ Registered bidders compete on a virtual platform, lien by lien. The opening bid on any property cannot be less than the total delinquent taxes, penalties, and costs.3D.C. Law Library. District of Columbia Code 47-1304 – Real Property Tax Assignment; Sale and Transfers If no bidder meets that minimum, the lien is bid off to the District itself.
To bid, you register through OTR or its designated vendor and put up a deposit of at least 20% of your anticipated purchase price, with a $1,000 minimum per property. Payment must be by certified check, cashier’s check, or money order payable to the DC Treasurer; personal and business checks are rejected.4Office of Tax and Revenue. 2025 Real Property Tax Sale Informational Guide A separate deposit is required for each property you plan to bid on.
Competitive bidding often drives the final price above what’s actually owed. That extra amount is called the surplus. Surplus does not reward the purchaser and does not stay with the District; it goes into a Surplus Fund and belongs to the owner.5D.C. Law Library. District of Columbia Code 47-1307 – Real Property Tax Assignment; Sale and Transfers If the property is redeemed within six months, the surplus is returned to the certificate holder. Bidders should price surplus carefully, because the statutory interest earned on redemption applies only to the amount paid excluding the surplus portion.
Paying for a Winning Bid
A winning bidder must pay the full bid amount, including surplus and costs, within five business days after the last day of the sale.6D.C. Law Library. District of Columbia Code 47-1347 – Payment of Purchase Price at Tax Sale The initial deposit counts toward the total. Miss the window and 20% of the deposit is forfeited and the sale canceled. Five business days moves fast; have financing lined up before you bid.
Once payment clears, OTR issues a Certificate of Sale. The certificate records the lien transfer, states the sale price, and confirms that the purchaser will earn 1.5% simple interest per month on the amount paid, excluding surplus, if the property is later redeemed.7D.C. Law Library. District of Columbia Code 47-1348 – Certificate of Sale – In General The certificate also carries a hard expiration: it becomes void unless the purchaser files a foreclosure action within one year.8D.C. Law Library. District of Columbia Code 47-1355 – Void Certificate of Sale A purchaser who lets that deadline pass forfeits every dollar paid to the District.
How the Owner Redeems
The owner has a statutory right to redeem for six months from the last day of the sale.9D.C. Law Library. District of Columbia Code 47-1306 – Real Property Tax Assignment; Sale and Transfers Redemption means paying the DC Treasurer the amount on the certificate of sale, excluding surplus, plus interest at 1.5% per month running from the first day of the month after the sale.10D.C. Law Library. District of Columbia Code 47-1334 – Interest Rate That works out to 18% a year.
The payoff can also include reimbursements to the purchaser. If more than four months have passed since the sale and no foreclosure has been filed, the owner must cover certain pre-complaint costs: up to $300 for a title search, the cost of recording the certificate of sale, and $50 for any required posting. Once a foreclosure complaint is on file, the bill grows to include court filing fees, service of process, publication, and capped attorney’s fees that start at up to $1,500 and climb with additional hearings. The practical lesson for an owner trying to save the property: redeem early, before the four-month mark, and the add-ons stay small.
To redeem, request an official payoff statement from OTR, which specifies the exact amount due. Payment must be in certified funds payable to the DC Treasurer.
What Happens If No One Redeems
If the six-month redemption period passes without the owner paying, the purchaser can file suit in the Superior Court of the District of Columbia to foreclose the right of redemption. The complaint cannot be filed earlier than six months after the sale date.11D.C. Law Library. District of Columbia Code 47-1370 – Complaints by Purchasers to Foreclose the Right of Redemption It also must be filed before the certificate of sale turns void at the one-year mark.8D.C. Law Library. District of Columbia Code 47-1355 – Void Certificate of Sale That leaves a working window of roughly six months to get the lawsuit on file.
The purchaser must notify everyone with a recorded interest in the property, including mortgage lenders, other lienholders, and the owner. The owner can still redeem even after the complaint is filed, by paying the full redemption amount plus the purchaser’s accumulated legal costs; many cases settle this way at the courthouse. If no one redeems, the court enters a final judgment foreclosing the right of redemption.
A judgment does not transfer title on its own. It directs the Mayor to execute and deliver a deed in fee simple once the purchaser pays the required amount to the Mayor.12D.C. Law Library. District of Columbia Code 47-1382 – Purchaser’s Deed; Payment; Compliance With Terms The purchaser prepares the deed, pays for its execution and recording, and furnishes a certified copy of the judgment.
The post-judgment deadlines are unforgiving. Pay the Mayor within 30 days of the final judgment, or any party can move to vacate the judgment as void. Fail to pay within one year and the judgment becomes void automatically, no motion needed. Record the executed deed with the Recorder of Deeds within 30 days, or again the judgment can be vacated. When a judgment is vacated the deed and certificate are void and the purchaser forfeits everything paid. Investors who have spent more than a year on a case can lose it all by missing a 30-day calendar entry.
Risks That Can Still Derail a Purchaser
Even after a clean sale and a successful foreclosure, three complications routinely trip up tax sale investors.
Title insurance is the first. Insurers often treat tax-sale titles as unmarketable because of the risk of procedural errors, defective notice, or unclear ownership history. Many will not issue a policy without a quiet title action, which produces a court order confirming the purchaser’s ownership is valid and free of competing claims. Budget for that extra litigation when calculating your return.
Bankruptcy is the second. If the owner files bankruptcy before a tax deed is issued and recorded, bankruptcy courts generally treat the property as part of the estate, and the automatic stay halts foreclosure. In Chapter 13, the debtor may be able to treat the purchaser as a secured creditor and pay the delinquent taxes through a repayment plan rather than through statutory redemption, in some cases even after the six-month period has technically run. A deal that looked close to the deed can become a multi-year bankruptcy case. For owners, bankruptcy is a last-resort tool to save a home, with its own serious financial consequences.
Federal tax liens are the third. Local real property tax liens generally take priority over federal tax liens, so the DC purchaser’s interest is not wiped out by an IRS lien on the property. The IRS does, however, retain a 120-day right of redemption after the sale. If it exercises that right, it pays the purchaser off and steps into the purchaser’s position. Checking the land records for federal liens before bidding is part of the homework.