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

If you own real property, you're responsible for paying property taxes on that property. The government uses that tax money to pay for schools, public services, libraries, roads, parks, and the like. Usually, the tax amount is based on the property's assessed value.

When a homeowner doesn't pay the property taxes, the overdue amount becomes a lien on the home. A lien effectively makes the property act as collateral for the debt. All states, including California, have a process that allows the taxing authority to sell a home to collect delinquent taxes.

If you don't pay your California property taxes, you could eventually lose your home through a tax sale. But a sale can't happen until five years after the property is tax-defaulted.

How Does California Handle Property Tax Non-Payment?

Property on which taxes remain unpaid at 12:01 a.m. on July 1 becomes what's known as "tax-defaulted" land. In most cases, if the property is tax-defaulted for at least five years, the county tax collector can sell that property to satisfy the delinquent taxes. (Cal. Rev. & Tax. Code § 3362).

In the case of a nuisance abatement lien, the property becomes subject to the tax collector's power to sell after three years. (Cal. Gov. Code § 38773.5).

Most tax-defaulted homes are sold at a public auction. However, the sale could be through a sealed bid sale or through a negotiated sale to a public agency or qualified nonprofit organization.

How You'll Find Out About a Property Tax Sale in California

In California, the tax collector must give you a written notice, as well as contact you personally, if possible, before selling your home at a tax sale.

Notice Before a Tax Sale in California

Under California law, the tax collector must send a notice of the proposed sale by certified mail not less than 45 days nor more than 120 days before the sale to your last known mailing address. (Cal. Rev. & Tax. Code § 3701).

It must also publish the notice in the newspaper or, if there are no newspapers in the area, post the notice in three public places. (Cal. Rev. & Tax. Code § 3702).

Tax Collector Usually Must Also Try to Contact You Personally

If the home is your primary residence, the tax collector must make a reasonable effort to personally contact you (the owner-occupant) not more than 120 days nor less than ten days before the sale. If the collector can't contact you, the collector must try to serve you a written notice not less than five days before the sale. (Cal. Rev. & Tax. Code § 3704.7).

Redemption Period Happens Before a California Tax Sale

Many states allow delinquent taxpayers to pay off the amounts owed (either before or after a tax sale) and keep the home. This process is called "redeeming" the property.

In California, the five-year redemption period happens before the tax sale. Again, under state law, the tax collector usually can't sell your home until five years after the property becomes tax defaulted. (Cal. Rev. & Tax. Code § 3691). You can pay off the delinquent amounts during this time and stop a tax sale from happening.

But you don't get the right to redeem the home after the sale. Your right to redeem expires at the close of business on the last business day before the sale date. (Cal. Rev. & Tax. Code § 3706, § 3707). If you send in the redemption amount via mail or any other method, the tax collector must receive it before that deadline. (Cal. Rev. & Tax. Code § 3707).

However, if your home doesn't sell or the purchaser who bought it at the sale backs out of the deal, your right to redeem revives. (Cal. Rev. & Tax. Code § 3693.1, § 3707).

How Much You'll Have to Pay to Redeem Your California Home

To redeem the home, you'll have to pay:

• the total amount of all past-due taxes
• delinquent penalties and costs
• redemption penalties, and
• certain fees, including a redemption fee. (Cal. Rev. & Tax. Code § 4102, § 4112).

How Do Property Tax Sales Work in California?

Again, most tax sales in California are public auctions. (Cal. Rev. & Tax. Code § 3693).

At the auction, the winning bid must be at least as much as the amount it would cost for you to redeem the home, plus costs, which include:

• the amount of the defaulted taxes
• delinquent penalties and costs
• redemption penalties, and
• a redemption fee. (Cal. Rev. & Tax. Code § 3698.5).

Challenging the Validity of the Sale to Get Your Home Back

After the tax sale occurs, you might be able to get your home back by convincing the board of supervisors (the body that supervises the operation of the county government) to rescind (invalidate) the sale. You must show that:

• the sale was invalid for some reason, like you paid the redemption amount, but the tax collector still sold the home to a new owner, or
• the sale had irregularities (meaning the procedures weren't proper).

The procedures for asking for a rescission are complicated, and you'll have to ask for a rescission by a specific deadline, usually a year after the tax deed is executed. (Cal. Rev. & Tax. Code § 3725). Getting your home back through this method is usually difficult and rarely happens. You'll most likely need an attorney's help to try to get the sale rescinded.

What Options Do I Have If I Can't Afford to Pay My Property Taxes in California?

Even though you'll get some time to redeem your California home before losing it to a tax sale, in most cases, it's better to take action earlier to try to make your taxes more affordable. You could, for example:

• 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.

Talk to a Lawyer

If you're facing a property tax sale in California—or need help redeeming your property—consider talking to a foreclosure or real estate lawyer.