If there is no redemption in five years, the premium becomes part of which entity?

• A. State general fund
• B. Municipality
• C. Trust fund
• D. County treasury

Answer: (B)

The main idea here is how premium money from a tax sale is allocated when there is no redemption within the allowed period. When a tax sale is conducted, bidders may pay a premium above the taxes due as part of securing the lien. That premium is considered revenue of the local taxing authority that issued the sale. If nobody redeems the property within the five-year window, the purchaser’s rights lapse and the premium becomes part of the local government’s own funds. Since the sale is conducted by the municipality to collect its taxes, the unredeemed premium stays with the municipality to be used as designated by local law. It wouldn’t go to the state general fund, a county treasury, or a trust fund.