Premiums are held and returned to the purchaser when which event occurs?

• A. Interest accrues
• B. Tax payment is made
• C. Premium lien is redeemed
• D. Property is reappraised

Answer: (C)

Premiums in a tax lien sale are the extra amounts bidders pay to win the bid. That premium is held by the tax authority and is returned to the purchaser when the lien is redeemed. Redemption occurs when the property owner pays the delinquent taxes (plus any interest and penalties) to satisfy the lien. So the event that triggers the return of the premium is the redemption of the premium lien. The other events—interest accruing, tax payment alone, or a property reappraisal—do not by themselves trigger the return of the premium.