Every autumn, Colorado counties auction thousands of tax liens and hundreds of treasurer’s deeds (tax deeds) online and at courthouse steps. Savvy investors can earn solid, low-risk returns—or acquire real estate at steep discounts—if they master the nuances of each sale type. Use this streamlined guide to understand the rules, avoid costly pitfalls, and build an informed strategy for the next Colorado tax sale.

Colorado Tax Lien Sales: How They Work

  • When & Where: September–December on platforms such as GovEase, county-run portals or court-house steps.
  • What You Buy: A lien—the county’s right to collect delinquent property taxes plus interest. You do not receive possession or ownership at this stage.
  • Interest Rate: 9 percentage points above the Federal Discount Rate, accruing only on the delinquent tax amount (not on any overbid).
  • Redemption Window: The property owner can repay the taxes anytime within 3 years. If redeemed, you recover your principal plus interest.

Profit Reality Check

Because interest accrues solely on the unpaid taxes, bidding large premiums erodes returns. Keep bids tight to the face value whenever possible.

Converting a Tax Lien Into a Treasurer’s Deed

After the three-year redemption period, you may apply for a treasurer’s deed:

  1. Application Fee: ≈ $1,000 in publication, title-search, and administration costs.
  2. Timeline: 4–8 months to complete county notices and hearings.
  3. Final Auction: Per Colorado law (post Tyler v. Hennepin 2023), the county must sell the deed at public auction to capture fair-market value. You can bid, but you are not guaranteed the property.

Due Diligence for Tax Lien Investors

Tax lien investing is a volume game—many small liens, diversified across counties. Keep research lean but targeted:

  1. Google & GIS Check – Improved vs. vacant land, homestead status, obvious red-flags.
  2. Owner-Occupancy – Owner-occupied parcels redeem more quickly, improving yield.
  3. Bid Discipline – Set a maximum premium percentage (e.g., 5 % over face value).

Pro Tip: Track liens in a spreadsheet and reinvest redemptions to compound your returns.

Treasurer’s Deed (Tax Deed) Auctions Explained

Unlike liens, treasurer’s deeds convey title—but with strings attached:

  • As-Is Title: Deeds function like quitclaim deeds; municipal liens and other encumbrances may survive.
  • Limited Title Insurance: Most insurers will not underwrite tax-deed properties without a quiet-title action or a certification service such as Tax Title Services.
  • Bidding Environment: Smaller, in-person courthouse auctions often draw lighter competition than online events.

Due Diligence for Treasurer’s Deed Buyers

Because you may end up with full ownership, dig deeper:

  • Exterior Inspection: Drive-by or hire local boots-on-the-ground.
  • Current-Owner Title Search: Spot senior mortgages, IRS liens, HOA super-liens, etc.
  • Municipal Lien Inquiry: Call city or county departments to uncover code violations or utility balances.
  • Exit Strategy Math: Budget for repairs, quiet-title costs, and holding time before resale or rental.

Tax Liens vs. Treasurer’s Deeds—Quick Comparison

  • Goal
    • Tax Lien: Earn interest; low involvement.
    • Treasurer’s Deed: Acquire property; higher involvement.
  • Capital Outlay
    • Lien: Face value of delinquent taxes + bid premium.
    • Deed: Full purchase price (often market-discounted) + rehab/legal costs.
  • Risk/Reward
    • Lien: Lower risk, capped return.
    • Deed: Higher risk, unlimited upside.

Key Costs & Timelines

Expense Tax Lien Treasurer’s Deed
Purchase Premium Optional N/A (highest bid wins)
Application Fee ≈ $1,000 (to apply for deed) N/A
Quiet Title / Certification Optional $2,000 – $5,000
Holding Period Up to 3 years (lien) Immediate ownership, but 2–6 months to clear title

Finding Upcoming Colorado Tax Sales

  • Online Portals: GovEase, RealForeclosure, Bid4Assets (county-dependent).
  • County Websites: Look for “Treasurer” or “Public Trustee” pages.
  • Courthouse Steps: Call smaller counties—many still run live auctions with lighter attendance.

Final Thoughts

When approached strategically, Colorado tax liens deliver predictable, interest-income returns, while treasurer’s deeds (tax deeds) can unlock deep-value real estate plays. Align your due-diligence depth with your exit strategy, respect the legal timelines, and track every cost in advance. Do that, and the Colorado tax sale season can become a reliable pillar of your investment portfolio.

Need help deciphering a title issue? Contact Blazer Title Search for a fast, investor-friendly report before you bid.