TAMPA - A slowing economy and stagnant real estate market has translated into a record year of late property taxes.

Tax collectors in Hillsborough, Pinellas and Pasco counties are reporting dramatically higher numbers of people who missed the April 1 deadline to pay their property tax bill. In Hillsborough County, the increase is near 30 percent.

Real estate experts blame the economy and the continued fallout from the subprime mortgage mess.

"It's not surprising that when people are unable to pay their mortgages, they're unable to pay their taxes," said Mike Larson, an analyst with Weiss Research in Jupiter.

When someone misses the deadline for their tax bill, the county prepares to issue and sell a tax certificate, which is essentially an IOU for the delinquent taxes.

Hillsborough's tax office advertised 33,106 tax certificates for sale last year to investors. This year that number jumped 29.8 percent, to 42,973.

Pasco and Pinellas collectors haven't posted their advertised numbers yet, but based on the delinquent notices they've sent out, both expect huge numbers of certificates to hit the auction block.

Pinellas mailed 45,323 notices last year, but a whopping 52,256 in March - the most ever.

"Usually it's in the high 30s or low 40s, so that's a big jump," Deputy Tax Collector Sam McClelland said.

Pasco, meanwhile, mailed 44,466 late notices last month, or 17.5 percent more than in March 2007.

The surge in delinquent property taxes mostly is because of the loose lending practices that swept through the housing industry a few years ago, says real estate analyst Jack McCabe, owner of McCabe Research & Consulting in South Florida.

Some lenders pushed risky adjustable-rate mortgages that left out traditional escrowing of taxes and insurance. Speculators and others who borrowed more than they should got stuck when the housing market slowed.

More than 80 percent of taxable properties in Hillsborough and Pinellas are residential - houses, condos, duplexes, rental units, vacant lots and land underneath mobile homes - so it's a safe bet most of this year's delinquent taxes will be connected to residential properties.

"We're seeing a lot of desperate people right now trying to hold on their properties and trying to figure out what they should pay and when," McCabe said.

Not everybody is in that kind of bind. John Phillips of Brooksville fell behind on his 2006 taxes when a tenant at a property Phillips owns in Hillsborough's Odessa section failed to pay his rent.

Phillips eventually got caught up on the property taxes, but not before the certificate on the rental home was sold to an investor. He ended up paying almost $100 of interest and a $55 penalty.

"I don't think honest people want to get behind on their taxes. There always seems to be some kind of circumstances," he said.

The tax sale surge isn't bad for everybody. Investors who dabble in tax sales are hoping to cash in at this year's auctions.

Ken Blair of Brooksville said he and other investors could enjoy a windfall because more tax certificates for sale means more options for investors next month when the sales for Hillsborough and Pinellas get posted at an online auction site, www.realauction.com.

Hillsborough's auction starts May 2; Pinellas opens bidding May 16. Pasco will hold its auction May 29 at a different online site, www.grantstreet.com.

Blair, who owns Florida Land Acquisition Through Tax Certificates, said investors can make 5 percent to 18 percent interest on their purchases, but they stand to make

more after two years of delinquency because at that point the liens can be consolidated and the foreclosure process started.

Whoever holds the consolidated liens accrues interest on each one and can cash in when the house is sold. The downside is that if the property doesn't sell after seven years, the tax certificate is worthless.

The process is long enough that a homeowner rarely loses his home.

"Most people won't lose their house because of a tax bill," Blair said.

Still, investors large and small are jumping into tax sales more often because of the potential for high returns, even if property owners are determined to pay their bills within a year of the tax sale.

"Five percent on $20,000 is a heck of a lot better that a passbook savings account," Blair said.

Reporter Rich Shopes can be reached at (813) 259-7633 or rshopes@tampatrib.com.