How Florida's 18% Tax-Certificate Interest Works

Florida tax certificates are famous for paying 18%, but that headline number hides how the math actually works. Between the bid-down auction and a guaranteed minimum, what you really earn is more nuanced. Here's the breakdown.

Key Takeaways

• The maximum rate on a Florida tax certificate is 18% per year (Fla. Stat. 197.172).
• Bidding starts at 18% and is bid down in quarter-percent steps; the lowest rate wins (Fla. Stat. 197.432).
• On redemption, a certificate earns a guaranteed 5% minimum, unless the rate was bid to 0% (Fla. Stat. 197.472).
• No-bid certificates are held by the county at the full 18%.

The 18% ceiling

Florida law caps the interest on a tax certificate at 18% per year (Fla. Stat. 197.172). That's the starting point for the auction, not the rate you'll necessarily get. Delinquent taxes themselves also accrue at 18%, which is what funds the certificate holder's return.

The bid-down auction

Here's the twist: investors compete by accepting a lower rate, not a higher price. Bidding opens at 18% and steps down in quarter-percent increments, and the certificate goes to whoever will accept the lowest interest (Fla. Stat. 197.432). On a desirable, low-risk parcel, competition can drive the winning rate into the low single digits. That's why "18%" is the ceiling, rarely the result.

The 5% floor (and the 0% gamble)

Florida protects investors from bidding themselves down to nothing. When a certificate is redeemed, it earns a mandatory minimum of 5% of its face value, even if the winning bid was 0.25% (Fla. Stat. 197.472). The one exception: a bid of 0%, which forfeits the floor. Why bid 0%? Some investors aren't after interest at all; they're betting the owner won't redeem, so they can pursue a tax deed and the property itself. For most, the 5% floor makes a low winning bid more attractive than it looks.

What it means for your return

Add it up and the realistic picture is: a ceiling of 18%, a competitive market that often clears far lower, and a 5% safety net on redemption. That's a solid, real-estate-backed yield, but not the guaranteed 18% the seminars imply. For the full strategy, see our Florida tax lien investing guide, and for the bigger picture, tax lien vs. tax deed. No-bid certificates, by the way, are held by the county at 18% and sold over the counter.

Want help thinking through tax-certificate returns in South Florida? Pure Equity Realty can point you to the right county resources. Talk to us.

Frequently asked questions

What interest rate do Florida tax certificates pay?

Up to 18% per year (Fla. Stat. 197.172), bid down at auction. On redemption, a guaranteed 5% minimum applies unless the rate was bid to zero (Fla. Stat. 197.472).

Why would someone bid 0% on a tax certificate?

They want the property, not the interest. A 0% bid forfeits the 5% floor but maximizes the chance of winning the certificate and eventually pursuing a tax deed if the owner doesn't redeem.

Do you always earn 18% on Florida tax liens?

No. 18% is the maximum and the opening bid; competition usually drives the winning rate lower. The redemption then pays your bid rate, or the 5% minimum if higher, unless you bid 0%.

Sources

• Florida Statutes 197.172 (18% maximum), 197.432 (bid-down), 197.472 (5% minimum on redemption).

Published June 20, 2026. General information, not investment advice; confirm current rules with the county tax collector.