To clear a tax lien on your property in Iowa, you redeem it by paying the county treasurer a lump sum that covers what the investor paid at the sale, 2% interest per month on that amount, any later taxes the investor has paid on your behalf (each with its own 2% monthly interest), a $20 redemption fee, and any notice costs the investor has incurred. Iowa tax lien redemption is handled entirely through the treasurer’s office, and once you have been served the formal notice that your rights are expiring, you have 90 days to pay in full.
What You Have to Pay to Redeem
Your redemption bill is built from several pieces, and all of them run through the county treasurer rather than the investor directly.1Iowa Legislature. Iowa Code 447.1 – Redemption, Terms
- The original sale amount, meaning the delinquent taxes and fees the investor paid at auction.
- The certificate of purchase fee, which is included in that sale amount.
- Interest at 2% per month on the sale amount, calculated from the month of sale through the month you redeem.
- Any subsequent property taxes the certificate holder has paid on your behalf, with 2% monthly interest on each payment running from the month it was made.
- A $20 redemption fee.
- Service costs, if the certificate holder has already served the notice of expiration of redemption rights.
Before you pay anything, request an official redemption statement from the county treasurer. It itemizes every tax year, fee, and interest calculation included in the lien. Paying even a few dollars short will leave the lien in place.1Iowa Legislature. Iowa Code 447.1 – Redemption, Terms
How the 2% Monthly Interest Adds Up
Once your delinquent taxes have been sold at the annual tax sale, the interest rate on what you owe is 2% per month, applied to the total the investor paid including the certificate fee.1Iowa Legislature. Iowa Code 447.1 – Redemption, Terms Annualized, that is 24%.
Two features of the calculation make the bill grow faster than owners expect. First, any fraction of a month counts as a full month. A sale in June and a redemption on July 3 means you owe 2% for June and 2% for July.1Iowa Legislature. Iowa Code 447.1 – Redemption, Terms Timing a payment to land before the first of a new month can save a full month’s interest. The minimum interest charge is one dollar, rounded to the nearest whole dollar.
Second, the certificate holder is allowed to pay later years’ property taxes on your behalf, starting one month and fourteen days after each new installment becomes delinquent.2Iowa Legislature. Iowa Code 446.32 – Payment of Subsequent Taxes by Purchaser Each of those payments is added to your redemption total and earns its own 2% monthly interest from the month it was made.1Iowa Legislature. Iowa Code 447.1 – Redemption, Terms An investor who has held the certificate for two or three years and covered each year’s taxes along the way creates a stacked debt where every layer is compounding independently.
The 90-Day Deadline After Notice
Iowa does not put a single hard expiration date on your redemption rights. The clock works in two stages.
First, the certificate holder must wait at least one year and nine months from the date of sale before they can serve a formal notice that your right to redeem is about to expire.3Iowa Legislature. Iowa Code 447.9 – Notice of Expiration of Right of Redemption The notice has to go out by both regular mail and certified mail to the person in possession, the person in whose name the property is taxed, and any mortgagee, contract vendor, or other party with a recorded interest.4Iowa Legislature. Iowa Code 447.9 – Notice of Expiration of Right of Redemption
Second, once that notice is properly served, you have exactly 90 days to redeem.5Iowa Legislature. Iowa Code 447.12 – When Service Deemed Complete If the 90th day falls on a weekend or holiday, you have until the close of business on the next business day. The notice is the trigger. Until you are served, your rights continue; after you are served, the countdown is strict.
Who Is Allowed to Redeem
Redemption is not restricted to the titled owner. Anyone entitled to receive the expiration notice can also pay off the lien. That group includes the current occupant, the person in whose name the property is taxed, a mortgagee, a vendor under a recorded contract of sale, a lessor with a recorded lease, and anyone else holding a recorded interest in the parcel. A person who acquires an interest in the property after the notice is filed can redeem as well.4Iowa Legislature. Iowa Code 447.9 – Notice of Expiration of Right of Redemption
Owners with a legal disability get additional protection. A legal representative may redeem on their behalf at any point before the treasurer’s deed is issued, and even after a deed is delivered, a person with a legal disability has up to one year after the disability is removed to file a court action seeking redemption.6Iowa Legislature. Iowa Code 447.7 – Redemption by Persons with a Legal Disability
If you occupy the home and cannot afford to pay, you can petition the county board of supervisors to redeem the parcel on your behalf.4Iowa Legislature. Iowa Code 447.9 – Notice of Expiration of Right of Redemption Whether the board grants that petition is up to the county, but the option exists.
How to Make the Payment
All redemption money is paid to the county treasurer, who then distributes it to the certificate holder. Many counties require guaranteed funds, which means a cashier’s check or money order rather than a personal check. Some counties also accept payment through the treasurer’s authorized website.5Iowa Legislature. Iowa Code 447.12 – When Service Deemed Complete Call the treasurer’s office before you go in so you bring the right form of payment and the exact amount from the current redemption statement.
Once your payment clears, the treasurer issues a certificate of redemption. That document is the proof the lien has been satisfied, the investor’s claim has been extinguished, and interest has stopped accruing. Keep it with your property records.
What Happens If You Miss the 90 Days
If the 90-day notice period runs out without redemption, the certificate holder can obtain a treasurer’s deed. You lose ownership. The deed has the same legal force as any other conveyance, and the new owner can proceed with eviction.7Iowa Legislature. Iowa Code 447.8 – Redemption After Delivery of Deed
Redemption after the deed is issued is technically possible, but only through an equitable action in the district court of the county where the property is located.7Iowa Legislature. Iowa Code 447.8 – Redemption After Delivery of Deed That is a lawsuit, not a payment at the treasurer’s window. In practical terms, the 90-day deadline is the one that decides whether you keep the property.
Interest Rate Cap for Active-Duty Servicemembers
If you are on active duty and the property tax obligation arose before you entered military service, the Servicemembers Civil Relief Act caps the interest rate at 6% per year during your period of service.8Office of the Law Revision Counsel. 50 USC 3937 – Maximum Rate of Interest on Debts Incurred Before Military Service For mortgage-related obligations the cap extends one year past the end of service. Any interest above 6% that would otherwise accrue is forgiven, not deferred.
The cap is not automatic. You have to request it from the county treasurer, and you have up to 180 days after your active-duty period ends to do so. The protection covers every branch, including Reservists called to active duty and National Guard members serving under qualifying federal orders.8Office of the Law Revision Counsel. 50 USC 3937 – Maximum Rate of Interest on Debts Incurred Before Military Service Against Iowa’s 24% annual rate on a sold lien, the difference is significant for anyone who qualifies.