Investors from Omaha to Chicago are snapping up tens of millions of dollars in delinquent property tax debts from Ohio county treasurers, giving them the right to collect on liens plus interest rates as high as 18 percent from homeowners already struggling under post-pandemic property tax hikes. Several of Ohio’s largest counties sold off record levels of tax lien certificates last year, according to data from their treasurers’ offices. Cuyahoga County led the pack, selling $18 million worth of debt in June alone — more than any year on record. Franklin County doubled its typical sales with $10 million sold, while Hamilton and Warren counties near Cincinnati also moved more debt than at any point in the past decade.
Ohio legalized the sale of delinquent tax debt back in 1998, joining roughly half of U.S. states that allow the practice. County treasurers defend the system as a critical enforcement tool, saying the threat of a lien sale is often enough to push property owners to settle up or enter payment plans before investors ever get involved. They argue it ensures everyone pays their fair share and keeps neighbors from freeloading. Some treasurers have built consumer protections into their sales, such as capping interest rates or screening out low-income households and small-dollar debtors.
But the consequences for those who do fall behind can be devastating. Last year, Ashtabula County Treasurer Angie Maki-Cliff wrote a letter to Tax Ease Ohio — an affiliate of Chicago-based PVOne Capital — asking for debt forgiveness on behalf of a 73-year-old widower whose $21,000 in unpaid taxes had been sold to the firm in 2014 and 2015. A decade later, he had already paid $40,500 and still owed another $21,600 thanks to compounding interest. The system rewards investors the longer a debtor stays underwater, since buyers of initial liens also gain the right to purchase all subsequent certificates when properties fall behind again on taxes — certificates that legally require an 18 percent interest rate atop the principal.
That dynamic has caught the attention of lawmakers in Columbus, where bipartisan legislation has been proposed to prohibit lien sales on residential and agricultural properties. Mortgage lenders are backing the effort, comparing the debts to predatory loans that trap borrowers in cycles ending with payments far beyond what they originally owed. Daniel Broering, CEO of People’s Bank Co., told state legislators that property owners should not be subject to predatory lien sales without consent, calling it a business model built around profit from displacement. Democrat Amy Acton, a former state health official now running for governor, has also proposed cracking down on county lien sales while allowing them against corporate bad actors.
The political pressure comes as new home assessments have triggered steep jumps in biannual tax bills across the state. More than 320,000 Ohioans have signed a petition calling for the constitutional abolition of property taxes altogether, a move that would eliminate a central pillar of state revenue. Lawmakers have already passed legislation expected to reduce bills by billions over three years, and the issue could loom large in what has become an unexpectedly close governor’s race.
