What Happens If I Don't Pay Property Taxes in Ohio?

If you have delinquent property taxes in Ohio, you'll likely face a tax lien sale or a tax foreclosure. You'll get notice before either of these sales happen and the opportunity to get caught up on the delinquent amounts plus interest, fees, and costs.

But if you can't pay up, you'll eventually permanently lose ownership of your home.

How Property Taxes Generally Work

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account.

But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly. (If you don't pay the taxes, the loan servicer might advance funds to pay them and then bill you for them. If you don't reimburse the servicer, the servicer could foreclose on the property using state procedures. See "Does a Mortgage Survive a Tax Foreclosure in Ohio?" below.)

How Tax Sales Generally Work

In a tax lien sale, the taxing authority sells the tax lien, and the purchaser gets the right to collect the debt along with penalties and interest. If the delinquent amounts aren't paid, the purchaser can typically foreclose or follow other procedures to convert the certificate to a deed.

In some jurisdictions, though, a sale isn't held. Instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale or the tax collector sells the property itself.

Again, you'll likely face a tax lien sale or a tax foreclosure in Ohio.

How Tax Lien Sales and Tax Foreclosures in Ohio Work

In Ohio, once a tax lien attaches to the property, the county treasurer can either sell the lien (whoever purchases the lien may foreclose after a certain amount of time passes) or the county treasurer may foreclose.

How Ohio Tax Lien Sales Work

Under Ohio law, the county treasurer may choose to sell tax liens at an auction or, in some cases, in a negotiated sale (a private sale). The county treasurer must mail you a notice before a tax lien sale. It must also publish the notice of sale in a newspaper. (Ohio Rev. Code § 5721.31).

At a tax lien auction, the winning bidder is whoever bids the lowest rate of interest on the debt. (Ohio Rev. Code § 5721.32). After the sale, the purchaser gets a tax certificate and becomes the lien owner. After the one-year redemption period (see below) expires, whoever purchases the lien may foreclose. (Ohio Rev. Code § 5721.37).

How Ohio Tax Foreclosures Work

Instead of selling the tax lien, the county treasurer may start a foreclosure against you in court. (Ohio Rev. Code § 5721.18). The court will enter a judgment and order the home sold at auction to satisfy the tax debt. After the court confirms the sale, the winning bidder gets a deed to the home. (Ohio Rev. Code § 5721.19).

When the county treasurer files the foreclosure with the court, you'll get a copy of the complaint (the lawsuit) and a summons.

Once the court orders a sale, notice of the sale must be published in a newspaper once a week for three weeks. (Ohio Rev. Code § 5721.19). Within 30 days after filing the complaint and before the final date of publication of the notice of foreclosure, the clerk of the court also mails a notice to each person named as a defendant in the complaint, like the last known homeowner and lienholders. (Ohio Rev. Code § 5721.18).

How the Right to Redeem Usually Works

Many states allow delinquent taxpayers to pay off the amounts owed and keep the home, even after a tax sale happens. This process is called "redeeming" the property.

Cost to Redeem, Usually

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time.

How Long Is the Redemption Period Typically?

Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.

In other states, though, the redemption period happens before the sale.

Can I Reclaim My Home After an Ohio Tax Lien Sale?

Following the tax lien sale, a one-year period must expire before the purchaser can start the foreclosure. So, after an Oho tax lien sale, you get at least one year to pay off all lien charges and interest. (Ohio Rev. Code § 5721.38). Once the one-year redemption period expires, the tax-lien purchaser can foreclose on your Ohio home by filing a lawsuit in court.

As part of the foreclosure, the home will be sold to satisfy the debt. You can still redeem up until the court confirms the foreclosure sale, which finalizes the foreclosure. (Ohio Rev. Code § 5721.38).

How Much It Costs to Redeem Your Home After a Tax Lien Sale in Ohio

The redemption price depends on whether you redeem before or after the purchaser starts the foreclosure.

Cost to redeem before a foreclosure starts. To redeem before the purchaser starts a foreclosure, you must pay an amount equal to the certificate price (or prices, if there is more than one tax certificate on your property), which includes taxes and fees plus interest. (Ohio Rev. Code § 5721.30, § 5721.38).

Cost to redeem after a foreclosure starts. To redeem after the purchaser starts the foreclosure, you must pay the certificate price plus 18% interest per year, attorneys' fees, costs, and other fees. (Ohio Rev. Code § 5721.38).

Can I Set Up a Payment Plan for My Property Tax Debt in Ohio?

If you can't afford to pay the redemption amount all at once, you can enter into a payment plan with the county treasurer to get caught up on the delinquent amounts. (Ohio Rev. Code § 5721.38).

Right to Redeem During an Ohio Tax Foreclosure

You can stop a tax foreclosure by the county and save your home at any time before the court confirms the sale by paying the taxes, assessments, penalties, interest, fees, and court costs. (Ohio Rev. Code § 5721.25). If you redeem after the foreclosure begins, you'll have to pay the amounts stated above and costs, and you must also show that the property is in compliance with all applicable zoning regulations, land-use restrictions, and building, health, and safety codes. (Ohio Rev. Code § 5721.25).

However, after the Ohio court confirms the sale, you lose ownership of the property.

Getting Caught Up With a Payment Plan

If you haven't previously defaulted on a payment plan for delinquent property taxes, you may enter into a contract with the treasurer to pay off the debt. (Ohio Rev. Code § 5721.25).

How to Avoid a Tax Lien in the First Place

Even though you'll get some time to redeem your Ohio home before you permanently lose ownership, in most cases, it's better to take action earlier to try to make your taxes more affordable. For instance, before you fall behind in your taxes, you could:

• look into whether you meet the criteria for a property tax abatement, or
• challenge the taxable value of your home if you think it's incorrect.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay. If you're already facing a tax lien sale or tax foreclosure in Ohio and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.