What Happens if the Owner Redeems the Property? Understanding Your Rights as a Tax Sale Investor

Louisiana law allows the original owner of a tax-delinquent property to redeem the property within three years of the tax sale. For investors, this can be frustrating if they seek merchantable title—but it’s also a key feature of the legal system that must be understood before bidding. 

What Is Redemption? 

Redemption is the process by which the delinquent taxpayer pays: 

• The amount of the winning tax sale bid 

• A 5% penalty 

• 1% interest per month until redeemed 

Upon redemption, the investor receives this full amount back from the tax collector or parish—with interest. 

What the Investor Receives 

If the property is redeemed: 

• You do not lose your investment—you are refunded the full amount you invested PLUS statutory interest and penalty. 

• Your Tax Sale Interest is extinguished (redeemed).  

• You may not pursue quiet title or evict the owner – You get paid on your investment, you don’t get the property.  

  
  

Strategic Considerations 

Some investors use tax sales as a short-term, interest-bearing investment vehicle. Others wait to see whether the property is redeemed before beginning legal action toward full possession.  

At Title Stream, we help investors understand and plan for all outcomes, including how to document expenses and handle redemptions with maximum efficiency.