What premium percentage can be bid at tax sale?

• A. 0%
• B. 1%
• C. 2%
• D. 5%

Answer: (A)

In tax sales, bidders typically compete by offering the lowest interest rate the borrower must pay on the delinquent taxes. The investor’s return comes from this interest, not from paying extra upfront. If the rules specify a premium percentage, a value of zero means no upfront premium can be bid at all. So the only permissible premium is 0%. The other percentages would imply paying an upfront premium, which these tax-sale rules do not permit.