Each year, people fall behind on their property taxes. In Florida, around June, the county auctions off Tax Liens. These are certificates on which people bid on the lowest interest points. The person who wins the tax lien auction pays the delinquent property tax to the county. The owner of the property still owns the property, but now, when/if they pay their delinquent property taxes, the Tax Lien Certificate Holder is paid their original investment plus the interest (The property owner has redeemed their property). The buying of these tax certificates is known as Tax Lien Investing.
If, after 2 years (but before 7 years), the property owner does not redeem their property, the Tax Certificate holder can apply for a Tax Deed. The property will now be set up for sale at a Tax Deed Auction. The starting bid is always at least the amount of the delinquent taxes, plus interest, and any fees the county incurred setting up the auction. If the property is homestead, half of the value of the property is also added to the starting bid (but that 1/2 amount will still be considered surplus later – more on that later)
The winner of the Tax Deed Auction now owns the property.